The U.S. Securities and Exchange Commission has dropped its long-running enforcement case against Gemini Trust Company, closing one of the most watched crypto lawsuits tied to the 2022 market fallout. Court filings submitted in Manhattan on January 23, 2026 show that the SEC and Gemini agreed to dismiss the case with prejudice, which bars the agency from bringing the same claims again.
The turning point was the recovery for Gemini Earn users. According to the source material, investors received a 100% in-kind return of their crypto assets through the Genesis Global Capital bankruptcy process between May and June 2024. That meant users got back their original tokens rather than devalued cash, preserving the appreciation those assets saw over time.
Earn program fallout began after withdrawals froze
Gemini Earn launched in February 2021. The program allowed users to lend Bitcoin and other cryptocurrencies to Genesis Global Capital in exchange for interest, while Gemini operated the platform interface and collected fees of up to 4.29%.
The crisis hit in November 2022, after the collapse of FTX triggered broader market stress and Genesis froze withdrawals. At that point, about $940 million in customer assets belonging to nearly 340,000 users was locked. The SEC sued Gemini and Genesis in January 2023, alleging that the product involved the sale of unregistered securities. Gemini rejected that view and argued that Earn was a lending product, not an investment contract.
Why the SEC chose to end the case
The source says the SEC relied on its discretion after investor harm had been fully addressed. Once users were made whole through in-kind repayment, the agency said continuing federal litigation was no longer “necessary or appropriate.” Gemini had also previously settled with New York state authorities for $37 million.
This detail matters. Other failed crypto lending platforms returned cash after asset values had already fallen, but the Gemini Earn recovery was completed in crypto through the Genesis bankruptcy process. In this case, restitution appears to have shaped the enforcement outcome.
Decision lands during a broader policy shift
The dismissal comes as President Donald Trump’s “Crypto President” agenda is described as moving ahead. The article says that under SEC Chairman Paul Atkins, the agency has started shifting away from aggressive litigation and toward “Project Crypto,” a framework centered on clearer taxonomies and innovation exemptions.
Industry observers cited in the source see the Gemini dismissal as a signal to major U.S. crypto exchanges. Even so, the SEC also stated that this outcome should not be read as a blanket change for every pending case.
Gemini’s public listing remains in focus
While the lawsuit was still active, Gemini completed its IPO in late 2025 and trades under the ticker GEMI, according to the report. Its valuation is listed at about $1.14 billion.
The source also says analysts at firms including Evercore ISI issued “Strong Buy” ratings on GEMI, pointing to the removal of the lawsuit overhang as a major growth driver for 2026. The legal fight is over. The regulatory significance of the dismissal will remain under close watch.