- All Gemini Earn investors have received 100% of their crypto back in their original form.
- The SEC agreed to dismiss the case against the exchange with prejudice, which means that they cannot file these specific charges again.
- This move is in line with a trend of US regulators dropping cases against major crypto firms over the last year.
The SEC has just dismissed its long-running lawsuit against Gemini after the exchange successfully returned funds to users.
Not only this, but the SEC also did so with prejudice, which proves that recovering customer funds can sometimes satisfy regulators more than a court victory.
Why the Gemini Lawsuit Came to an End
The SEC filed a joint notice to end its case against Gemini in a New York federal court on Friday.
The agency noted that its decision was based mostly on the fact that investors are now finally whole.
The SEC will drop a crypto lending lawsuit against Gemini Trust, a firm founded by the Winklevoss twins https://t.co/6nDECebnYE
— Bloomberg (@business) January 23, 2026
When the Earn program collapsed in 2022, nearly $940 million in assets became stuck, and users found their money inaccessible for a very long time.
However, the bankruptcy process for Genesis Global Capital changed everything, and by mid-2024, the courts helped handle a massive payout. Gemini also stepped up by contributing $40 million to the recovery fund.
A New Path for Crypto Regulation
The recent filing didn’t happen in isolation because it comes after a set of similar moves by the SEC under the current administration. Over the last year, the agency has dripped several similar cases against companies like Binance and Kraken, and experts believe that the US government is finally moving towards being friendlier on digital assets.
Even the Department of Justice recently dropped a case against a former manager at OpenSea.
BREAKING: 🇺🇸 SEC drops/ends investigation into OpenSea.
NFTs are so back and are not securities 🔥 pic.twitter.com/6MQjKU0isy
— CMDR (@CommanderCrypto) February 22, 2025
In all, these actions show that the era of aggressive crackdowns is slowing down. The SEC itself is now using its discretion to close cases where the harm to investors has been fixed.
What This Means for the Future
This development has brought some much-needed closure to an already dark chapter in crypto history.
The Winklevoss twins, who lead Gemini, have shown relief over the outcome and they maintained that their focus was always on getting the assets back to their customers.
The market has also reacted positively to this news and Gemini can now focus on new products instead of legal defence. For example, the exchange recently got the green light to launch its own prediction markets.
Introducing Gemini Predictions, now live across all 50 US states 🇺🇲
Users can trade on outcomes of real world events with near instant execution and full transparency. pic.twitter.com/1wRhkLCEG5
— Gemini (@Gemini) December 15, 2025
The Trend of Dismissals
As mentioned, we are seeing a clear pattern in how the SEC handles these disputes now.
If a company can prove that it has helped its users become whole again, the regulator is more likely to drop the case. This is a far cry from the environment in 2023 under the former SEC Chair, Gary Gensler.
Back then, the government seemed intent on fighting every major player in the space.In all, this development is a major win for both the exchange and its users.
It will also likely encourage other firms to settle their outstanding debts. The crypto industry is now entering a more mature phase with fewer lawsuits and clearer rules, and investors have more room to create and grow.