- SEC and Gemini jointly request a 60-day legal pause on settlement over Earn program.
- Gemini faces an SEC lawsuit for allegedly offering unregistered securities to investors.
- Legal pause aligns with SEC’s softened stance as Gemini prepares for possible IPO launch.
The U.S. Securities and Exchange Commission (SEC) and cryptocurrency exchange Gemini have jointly requested a 60-day stay in their ongoing legal battle. In a letter submitted to the U.S. District Court for the Southern District of New York, both parties asked to suspend all deadlines. The request allows time to explore a potential resolution to the dispute involving Gemini’s crypto lending program, Gemini Earn.
The SEC originally filed the lawsuit in January 2023, accusing Gemini of offering and selling unregistered securities through the Earn program. According to the regulator, the platform raised billions of dollars’ worth of crypto assets from investors without proper registration or investor protections.
Source: CourtListener
Genesis Reaches Settlement
In March 2024, Genesis — Gemini’s lending partner — agreed to pay $21 million to settle similar charges. While that case closed, the SEC’s enforcement action against Gemini proceeded independently.
Although the letter did not outline specific terms of a resolution, it signals a notable shift in regulatory tone. Under the current administration, the SEC has withdrawn several lawsuits against prominent crypto firms, including Coinbase, Ripple, Kraken, and OpenSea.
Just last month, co-founder Cameron Winklevoss announced that the SEC had officially closed its investigation into the exchange and would no longer pursue enforcement action related to other matters. Political connections have also surfaced during this regulatory pivot. In June, the Winklevoss twins donated $2 million worth of Bitcoin to Donald Trump’s presidential campaign. However, the donation was refunded due to legal contribution limits.
Related: Circle moves to IPO after failed SPAC and delays: Report
IPO Plans Underway
The pause in legal proceedings comes at a critical time for Gemini. According to a report, the exchange explores an initial public offering that could launch later this year. The company recently appointed a chief financial officer, indicating expansion and investor engagement preparations.
Meanwhile, Gemini has addressed additional regulatory concerns outside of the SEC’s scope. In January, Gemini Trust Company agreed to a $5 million settlement with the U.S. Commodity Futures Trading Commission over allegations of misleading statements related to Bitcoin futures contracts.
Meanwhile, the ongoing discussions between the SEC and Gemini could help clarify legal issues, with the requested 60-day stay potentially providing the needed time. This may benefit Gemini as it moves closer to a public listing while also influencing the SEC’s stance on cryptocurrency regulation.
