SEC Drops Case After Full Investor Recovery

The US Securities and Exchange Commission (SEC) has reportedly agreed to dismiss the prolonged Gemini lawsuit. While the case began in the aftermath of the 2022 crypto market collapse, it is now ending with the investors’ full recovery of funds.  

SEC Drops Gemini Lawsuit, Investors Fully Repaid

According to a Reuters report, the US SEC has decided to drop its protracted lawsuit against the Winklevoss Twins’ Gemini. On Friday, the regulator announced the dismissal of the Gemini lawsuit, linked to the exchange’s now-defunct Earn product. The SEC stated that the case is no longer necessary.

In a court filing dated January 23, 2026, the SEC and Gemini Trust Company jointly agreed to drop the case permanently.  The SEC asserted that the decision was made on its own judgment, with the full repayment of investors playing a key role. The crypto exchange noted that the Gemini Earn investors had fully recovered their crypto assets through the Genesis Global Capital bankruptcy process in May-June 2024. The filing stated,

“The 100 percent in-kind return of Gemini Earn investors’ crypto assets through the Genesis Bankruptcy and the settlements noted above, and in the exercise of its discretion, the Commission believes the dismissal of the claims against Defendant is appropriate.”

It is worth noting that the Gemini lawsuit dismissal comes on the heels of the platform’s recent milestones. For instance, Gemini received CFTC approval to launch its own prediction markets as major crypto exchanges are exploring similar opportunities.

Why the SEC Took Gemini to Court?

In 2023, the SEC launched the Gemini lawsuit, alleging that the company illegally sold securities to its investors through its crypto lending platform. As per the case, investors in Gemini’s Earn program had loaned their crypto to Genesis Global Capital, a crypto intermediary that is also named in the lawsuit. Subsequently, Genesis froze these funds after the 2022 FTX collapse, which led to the long crypto winter.

Last year, in April, the SEC, under Acting Chairman Mark Uyeda, paused the Gemini lawsuit. However, the case had survived a motion to dismiss, as a federal judge ruled that the SEC had plausibly shown potential securities law violations. The latest development reveals that Gemini reached a settlement with New York regulators, and Genesis has already settled with the SEC by paying a $21 million penalty.

Significantly, this major victory for Gemini is just one of several high-profile crypto lawsuits that concluded under President Trump’s administration. This also marks one of the first major crypto wins in 2026. As CoinGape reported, a Federal Judge recently dismissed a prolonged class-action suit against Mark Cuban and the Dallas Mavericks.

When Genesis froze customer accounts, the total value of assets in the Earn program was reportedly $940 million. As per the latest filing, the Winklevoss Twins have repaid 100% of their customer funds.