Gemini, the crypto exchange founded by the Winklevoss twins, has reached a settlement with the US Securities and Exchange Commission (SEC) concerning allegations related to its crypto lending program, known as Gemini Earn. The settlement was announced on Monday in a letter filed in Manhattan federal court.
SEC Lawsuit Against Gemini Nears Resolution
The SEC, under its previous leadership criticized for its characterized enforcement actions targeting key industry players, had previously accused the exchange of failing to register its Earn program, which allowed users to lend Bitcoin (BTC) and other cryptocurrencies to Genesis Global Capital in exchange for interest payments.
The lawsuit claimed that both Gemini and Genesis bypassed necessary disclosure requirements designed to protect investors. In January 2023, the SEC initiated legal action against both companies, seeking accountability for these alleged violations.
Genesis eventually filed for bankruptcy and accepted a $21 million fine from the SEC to settle its legal issues, although it did not admit to any wrongdoing. Meanwhile, Gemini has consistently denied any misconduct related to its Earn program.
According to Reuters, the settlement, pending approval from the SEC, aims to “completely resolve” the lawsuit over Gemini Earn. Lawyers have requested a US District Judge to extend the deadline for finalizing the settlement until December 15, effectively pausing all related deadlines for the time being.
A Step Forward For Regulatory Clarity
In a broader context, the US Securities and Exchange Commission has been adjusting its approach to overseeing the cryptocurrency industry since Donald Trump’s presidency began last January.
Under the leadership of Chair Paul Atkins, the regulator has consistently taken a soft stance toward digital assets and their key players. The regulator has dropped enforcement actions against other exchanges, such as Coinbase, Binance, and Uniswap.
This comes just four days after Gemini successfully raised $425 million in its initial public offering (IPO), valuing the company at approximately $3.3 billion.
Following the announcement of the settlement, shares of Gemini, trading on the Nasdaq under the ticker name GEMI, closed Monday’s trading session at $32.52, a 16% increase from the $28 IPO price.
Featured image from DALL-E, chart from TradingView.com
