Gemini and SEC Strike Tentative Settlement in Landmark Earn Program Lawsuit
Breaking: Crypto giant Gemini reaches provisional agreement with SEC over controversial Earn program allegations—just another day in regulatory purgatory.
The Settlement Details
Neither side disclosed specific terms, but insiders confirm the deal avoids admitting wrongdoing while establishing new compliance frameworks. The SEC's enforcement division gets another notch on its belt without actually clarifying crypto regulations—because why provide clarity when you can just collect settlements?
Market Implications
Gemini avoids potentially crippling penalties while the SEC maintains its pattern of regulation-by-enforcement. Retail investors left holding the bag get… well, whatever the legal teams decided was cheaper than continued litigation. Another classic case of regulators protecting investors by making lawyers richer.
Industry observers note this follows the predictable pattern: massive platform growth, regulatory crackdown, negotiated settlement—rinse and repeat across the crypto landscape. Because nothing says 'investor protection' like years of uncertainty followed by closed-door deals.
Gemini Earn dispute and fallout from Genesis
Gemini Earn allowed customers to lend Bitcoin (BTC) and other cryptocurrencies to Genesis Global Capital in exchange for interest, with Gemini collecting fees of up to 4.29%. At its peak, the program attracted hundreds of thousands of users.
Trouble began in Nov. 2022, when Genesis froze withdrawals after FTX’s collapse. By January 2023, Genesis filed for bankruptcy, leaving $900 million in customer assets stranded from roughly 340,000 Gemini Earn users.
The SEC sued Gemini and Genesis that same month, claiming they sidestepped disclosure rules designed to protect investors. While Genesis later paid a $21 million penalty to settle without admitting wrongdoing, Gemini continued to contest the allegations.
The tentative agreement now signals an end to that standoff, although final terms remain subject to SEC approval.
IPO timing and shifting regulatory climate
The news comes just days after Gemini completed its initial public offering, raising $425 million at a valuation of $3.3 billion. Shares have since climbed to $32.52, 16% above their $28 debut price. The timing underscores how
Gemini is attempting to turn the page on its Earn controversy while positioning itself as a publicly traded exchange in a climate of lighter regulatory touch.
Since Donald Trump took office in Jan. 2025, the SEC has eased its oversight of the crypto sector, reflecting a broader policy shift that has benefited firms like Gemini. For co-founders Tyler and Cameron Winklevoss, each now worth an estimated $4.6 billion, the settlement could help clear a major overhang just as the exchange embarks on its next phase of growth.
