Gemini and SEC Seek Stay in Legal Battle Over Crypto Lending Program

Gemini and SEC Seek Stay in Legal Battle Over Crypto Lending Program

TLDR

• SEC and Gemini have requested a 60-day stay of their lawsuit to explore a resolution
• The lawsuit relates to the Gemini Earn program which the SEC alleged offered unregistered securities
• Genesis already settled related charges for $21 million in March 2024
• The request comes amid the SEC easing oversight of the crypto industry under the Trump administration
• Several other SEC crypto investigations have recently been closed or settled

The Securities and Exchange Commission (SEC) and cryptocurrency exchange Gemini have jointly asked a New York federal court to pause their ongoing lawsuit for 60 days. Both parties want time to explore a possible resolution to the case centered on Gemini’s crypto lending program.

In a letter filed on April 1 to Judge Edgardo Ramos, lawyers from both sides requested that all deadlines in the case be suspended. They stated this pause would “allow the parties to explore a potential resolution” and added that “no party or non-party would be prejudiced by a stay.”

The lawyers argued that resolving the case would save judicial resources. They proposed submitting a joint status report within 60 days after the court grants the stay.

Background of the Dispute

The SEC filed its lawsuit against Gemini and crypto lending firm Genesis Global Capital in January 2023. The regulator claimed both companies offered unregistered securities through the Gemini Earn program.

Gemini Earn allowed customers to lend their crypto assets to Genesis in exchange for interest payments. Gemini took a fee as high as 4.29% for facilitating these transactions.

The program ran into trouble in November 2022 when Genesis halted customer withdrawals. This happened the same month that FTX, another major crypto exchange, collapsed. Genesis later filed for bankruptcy in January 2023.

At the time Genesis froze withdrawals, it held about $900 million in assets from roughly 340,000 Gemini Earn customers. The SEC alleged that both companies bypassed disclosure requirements meant to protect investors.

Recent Developments

In March 2024, Genesis agreed to pay $21 million to settle charges related to the lending program. This settlement is pending resolution of claims in Genesis’s bankruptcy case. Genesis did not admit wrongdoing as part of this agreement.

The enforcement case against Gemini, run by billionaire twins Tyler and Cameron Winklevoss, has remained active until now. Gemini has denied any wrongdoing in the matter.

Changing Regulatory Climate

The joint request comes amid a broader shift in the SEC’s approach to crypto regulation. Under the Trump administration, which took office in January 2025, the SEC has eased oversight of the cryptocurrency industry.

In February, Gemini reported that the SEC had closed a separate investigation into the firm. At that time, Cameron Winklevoss claimed the SEC’s actions had cost Gemini “tens of millions of dollars in legal bills alone and hundreds of millions in lost productivity, creativity, and innovation.”

The SEC has recently dropped several lawsuits against crypto companies that were launched during the Biden administration. This includes ending civil cases against crypto exchanges Coinbase and Kraken, and settling with Ripple Labs over unregistered security sales.

Other crypto companies including OpenSea, Crypto.com, and Uniswap have also reported that the SEC closed probes into their operations. These investigations had been looking into alleged breaches of securities laws.

The letter filed by the SEC and Gemini did not specify what a possible resolution might involve. Options could include a settlement, the SEC dropping the case entirely, or some other outcome.

Both Tyler and Cameron Winklevoss have an estimated net worth of $3 billion each, according to Forbes magazine. The twins participated in the White House Crypto Summit held in March 2025.

The case remains filed in the U.S. District Court, Southern District of New York, under the case number 23-00287. Neither lawyers for Gemini nor the SEC immediately responded to requests for comment on the proposed stay.

The post Gemini and SEC Seek Stay in Legal Battle Over Crypto Lending Program appeared first on CoinCentral.