Gemini Trust, the cryptocurrency exchange founded by Cameron and Tyler Winklevoss and now operating under Gemini Space Station Inc., has reached a settlement “in principle” with the U.S. Securities and Exchange Commission (SEC) to resolve a long‑running lawsuit tied to its defunct Earn program, according to a court filing in Manhattan federal court.
The joint filing, disclosed Monday and first reported by Reuters, asked U.S. District Judge Edgardo Ramos to pause all deadlines until December 15 as the two sides finalize settlement paperwork. The agreement remains subject to formal SEC approval.
Background: The Earn program and Genesis collapse
Gemini launched Earn in 2021, allowing customers to lend Bitcoin and other crypto assets to Genesis Global Capital in exchange for interest of up to 7.4% APY, from which Gemini collected fees of about 4.29%. At its height, Earn attracted roughly 340,000 users and more than $900 million in deposits.
However, in November 2022, Genesis froze withdrawals following the collapse of FTX, triggering a liquidity crisis. Genesis later filed for bankruptcy in January 2023, leaving customer assets stranded. That same month, the SEC sued Gemini and Genesis, alleging they offered and sold unregistered securities.
Genesis agreed earlier this year to pay a $21 million civil penalty to settle without admitting wrongdoing. Gemini contested the charges and continued litigation, until now.
Settlement details and implications
The preliminary agreement would bring the SEC’s case to a close after nearly three years of litigation. Terms of the deal have not been disclosed. According to experts familiar with similar cases, penalties could end up significantly lighter than those levied under the previous administration’s enforcement‑first posture, possibly in the $10–20 million range.
While the SEC has required the filing and approval of a formal settlement offer before the Commission votes, both sides signaled confidence that the agreement will resolve the standoff fully.
For investors, Gemini has pledged to return approximately $1.1 billion to Earn participants, though repayment is still dependent on final distributions from Genesis’s bankruptcy proceedings.
Regulatory climate shift
The case was emblematic of the SEC’s aggressive enforcement strategy under former Chair Gary Gensler, who took the stance that most crypto tokens and yield‑bearing products constituted securities. Alongside other cases, such as Kraken’s staking service, Gemini Earn became a flashpoint in debates over regulation by enforcement.
Since Donald Trump assumed the presidency in January 2025, the climate has shifted. Paul Atkins, the new SEC Chair, has indicated support for clearer frameworks over blanket enforcement. The agency has paused or scaled back several investigations, and created a Crypto Task Force tasked with outlining bespoke rules for digital asset products.
The Gemini settlement follows recent lighter outcomes in cases involving Ripple Labs and other firms, underscoring a softer regulatory posture that industry participants say better balances oversight with innovation.
Market context: IPO and share performance
The timing comes just days after Gemini’s initial public offering, which raised $425 million at a valuation of $3.3 billion. Shares debuted at $28 and closed Monday at $32.52, up 16% since the IPO.
For the Winklevoss twins, who have an estimated combined net worth of $9.2 billion post‑IPO, resolving Earn’s legal overhang could help Gemini pivot toward growth as a publicly traded exchange.
Expert perspectives
- Vincent Liu, CIO of Kronos Research, noted that Earn’s collapse was “a stark reminder of the risks behind yield‑bearing crypto products,” but said the resolution signals regulators “are ready to reset the relationship with established firms in the sector.”
- Haseeb Qureshi, managing partner at Dragonfly, cautioned that while a lighter approach helps the industry, it risks “papering over deep deficiencies in how retail investor protections are enforced.”
Industry observers say the Gemini case could serve as a template for future oversight, clarifying whether disclosures, registration, or caps will govern yield‑based lending and staking products rather than treating them as off‑limits.
What’s next
If finalized, the SEC settlement would close one of the most high‑profile enforcement actions stemming from the 2022 crypto crash. For Gemini, it marks a turning point: the end of years of litigation and the start of a new chapter as a public exchange in what may be a friendlier regulatory environment.
Kristian Koch
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