Why the SEC Plans to Settle its Legal Battle over Gemini Earn

The SEC reached a resolution in principle with Gemini to settle a previous lawsuit. This lawsuit concerns the 2023 Gemini Earn closure, which saw customers unable to withdraw funds.

In addition to Gemini’s recent IPO, this also takes place in a broader context of shrinking US crypto enforcement. Less than a week ago, the nominee for CFTC Chair alleged that a Gemini co-founder was lobbying against him.

Gemini vs the SEC

The Gemini Earn incident took place in January 2023, when customers unexpectedly had their assets frozen due to the platform’s bankruptcy. Many were unable to recover their assets, prompting a lengthy legal battle.

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According to new reports, however, Gemini and the SEC are prepared to end it:

“The parties in this case have reached a resolution in principle that would completely resolve this litigation, subject to review and approval by the Commission,” they claimed in a joint filing to US District Judge Edgardo Ramos.

This SEC resolution comes at an auspicious time for Gemini, which just conducted a major IPO last week. The firm raised $425 million, bringing its total valuation to $3.3 billion. Apparently, the crypto exchange is now taking this opportunity to tie off some of its loose ends.

A War on Crypto Enforcement

Both parties asked for a new deadline of December 15 to submit final paperwork. Although Gemini and the SEC reached a resolution in principle, an informal agreement that both parties want to wrap up the affair, there’s still some extant business.

After all, the Ripple vs SEC case lingered on for several months in a similar situation. This battle may continue existing, at least on paper, for the foreseeable future.

In any event, this is just one component of President Trump’s ongoing war on crypto enforcement. The SEC dropped an unrelated investigation against Gemini several months ago, prompting co-founder Cameron Winklevoss to share his frustration with federal regulators.

Since then, the Winklevoss twins have reportedly attempted to influence the composition of federal crypto regulators. For example, CFTC Chair nominee Brian Quintenz recently alleged that Tyler Winklevoss lobbied against his confirmation.

The SEC’s new agreement with Gemini doesn’t seem directly related to these claims, but it’s part of the same ongoing trend. Under the second Trump administration, federal crypto investigations are quietly disappearing, and it doesn’t seem like they’ll stop any time soon.