Gemini and SEC reach settlement on civil penalty payment
On September 15, 2025, cryptocurrency exchange Gemini and the U.S. Securities and Exchange Commission (SEC) reached an "agreement in principle." The provisional settlement marks a key milestone in the lawsuit and allows the parties to move forward in resolving the legal conflict.
In early 2023, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against cryptocurrency exchange Gemini and lending company Genesis Global Capital, accusing them of selling unregistered securities. The lawsuit concerned the Gemini Earn program, which allowed investors to earn a return by lending their crypto assets to Genesis. According to the SEC, the program helped raise billions of dollars for the Winklevoss twins' company coffers but affected the interests of hundreds of thousands of investors.
The Gemini Earn program was launched in late 2020 and allowed users to earn up to 7.4% APY on their crypto assets. According to the terms, Gemini acted as an agent and Genesis as the borrower. The program's revenue was distributed between both companies and users. However, in November 2022, after the FTX bankruptcy, Genesis froze withdrawals, which led to a loss of assets for all program participants. Gemini's co-founders, Tyler and Cameron Winklevoss, claimed that Genesis owed their customers approximately $900 million.
The legal battles between the parties continued with mixed success. Although Gemini filed a motion to dismiss the case, the U.S. court in New York rejected it, finding the SEC's arguments "plausible." Judge Edgardo Ramos confirmed that the plaintiffs credibly argued that Gemini and Genesis offered unregistered securities and that the Earn product meets the criteria for an investment contract, as defined in the Howey test.
On September 15, 2025, Gemini and the SEC signed a settlement agreement, agreeing to pay a civil penalty of $21 million.
Under the deal, the fine will only be paid after the company fully repays all of its creditors, including retail investors affected by the Gemini Earn collapse. The settlement document emphasizes that the exchange prioritizes the compensation for affected investors over regulatory penalties.
The SEC’s broader case against Gemini remains ongoing. The regulator is seeking a permanent injunction to prevent future securities law violations, along with the return of what it calls illegally obtained profits.
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