The U.S. Securities and Exchange Commission (SEC) has officially decided to drop its civil lawsuit against Gemini Trust Company, providing significant relief to the exchange”s founders, Tyler and Cameron Winklevoss. This development follows the complete recovery of funds for users of Gemini Earn, concluding a lengthy legal battle that began in 2023.
The SEC”s decision to dismiss the lawsuit, which was made on January 23, 2026, is marked as a dismissal with prejudice. This means the case is permanently closed and cannot be reopened. The SEC indicated that the decision was based on its assessment of the situation, with the full repayment to investors being a crucial factor.
All affected users of Gemini Earn received back 100% of their crypto assets, rather than cash. These repayments were facilitated through the bankruptcy process of Genesis Global Capital, which occurred between May and June 2024. By ensuring that users were fully reimbursed, the SEC noted that the potential harm to investors was substantially mitigated.
The collapse of Genesis amid a downturn in the broader crypto market is what initiated the SEC”s enforcement action in January 2023. At that time, withdrawals were frozen, causing approximately $900 million in assets belonging to nearly 340,000 users to become inaccessible. In an effort to assist in the resolution, Gemini contributed around $40 million in Bitcoin and an additional $10 million in various assets, alongside a $37 million penalty as part of a settlement with New York regulators.
Throughout the legal proceedings, Gemini engaged in multiple discussions with both state and federal regulators, working diligently to address the concerns raised. The recent repayment of users has been pivotal in progressing toward the dismissal of the lawsuit.
The SEC”s action in dropping the lawsuit reflects broader trends in regulatory oversight within the cryptocurrency space, emphasizing the importance of safeguarding investor interests amidst evolving market conditions.
