Gemini and SEC Move Toward Resolution in Two-Year-Old Crypto Lending Dispute

Jimmy Aki
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On September 15, Gemini Trust Company and the US Securities and Exchange Commission (SEC) filed a joint update in federal court, stating they had come to a resolution in principle. This development signals progress toward settling the crypto lending program lawsuit, which was first filed against Gemini in 2023.

Court to Receive Next Update on December 15

In a letter filed in Manhattan federal court, lawyers for the SEC and Gemini said the deal would completely resolve the lawsuit, provided the commission gives final approval.

Both sides asked Judge Edgardo Ramos to pause all deadlines as they gave themselves until December 15 to file the final status terms.

If completed, the settlement could serve as a model that shapes how new products in crypto lending are designed — whether they must go through registration and how disclosures should be presented to investors.

It could also set boundaries on products that regulators decide are simply off-limits.

The SEC first brought the complaint in January 2023, targeting Gemini and its partner Genesis Global Capital. The regulator said the companies had offered unregistered securities through Gemini Earn, a program that let customers lend their digital assets for interest.

The service ran from February 2021 until November 2022.

Gemini Earn pulled in about $900 million from 340,000 customers. Following the collapse of FTX in November 2022, Genesis froze withdrawals, leaving investors stranded.

By January 2023, Genesis had filed for bankruptcy, and Gemini Earn customers could not reach their funds.

The program’s structure was straightforward yet controversial. Customer assets went to Genesis, which promised to pay interest and the exchange collected fees of up to 4.29%.

The SEC argued this arrangement violated federal law because it failed to provide the disclosures required of a registered securities offering.

Genesis has already closed its chapter with the regulator. Earlier this year, it paid $21 million in a settlement without admitting wrongdoing.

Settlement Comes as US Regulators Push for Greater Clarity

The agreement with Gemini adds momentum to a wider shift in US oversight of crypto lending and policies.

Since President Donald Trump returned to the office in January 2025, the SEC has leaned toward negotiated outcomes. Penalties are still high, but settlements such as Gemini’s suggest regulators are more open to dialogue than in previous years.

Other agencies are moving in the same direction. On August 1, the SEC and the Commodity Futures Trading Commission (CFTC) launched a joint initiative called the Crypto Sprint.

The project aims to unify rulebooks, set up sandboxes for innovation pilots, and align regulatory calendars. For market participants, this promises fewer overlaps and less confusion.

Policy changes are not limited to trading platforms. In July, the GENIUS Act became law, setting out a framework for stablecoins. The US Treasury is now collecting public feedback on how to implement it.

Meanwhile, Federal Reserve Vice Chair for Supervision Michelle Bowman recently called for easing restrictions on central bank staff holding cryptocurrencies, a signal of softening attitudes at the top.

September has continued the momentum as the SEC announced that its Crypto Task Force will host a roundtable on October 17. The event will focus on how technology can preserve privacy while equipping authorities to manage risks.

Taken together, these moves point to a future where crypto operates under clearer rules.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.