TechFlow News: On January 24, according to CoinDesk, the U.S. Securities and Exchange Commission (SEC) announced on Friday that it has decided to dismiss its lawsuit against cryptocurrency exchange Gemini, which concerned the company’s now-defunct Earn product. The SEC stated that the lawsuit is no longer necessary, as Gemini Earn investors have recovered 100% of their assets through Genesis’s bankruptcy proceedings.
In 2023, the SEC filed suit against Gemini and Genesis Global Capital, alleging that the two companies had sold unregistered securities in the form of Gemini’s Earn product. Investors deposited funds with Gemini, which then lent those funds to Genesis. Following the collapse of FTX in 2022 and the broader downturn in the cryptocurrency market, Genesis suspended withdrawals.
In its court filing on Friday, the SEC noted that Gemini has fully repaid investors’ funds through Genesis’s bankruptcy proceedings. Although the lawsuit survived an initial motion to dismiss, the SEC determined that dismissal was appropriate following the execution of a new joint stipulation.
According to the filing, Genesis has reached a settlement with the SEC, agreeing to pay a $21 million penalty, while Gemini has also settled with New York State regulators.
