SEC,Gemini Pause Legal Battle to Explore Resolution

The Securities and Exchange Commission (SEC) and Gemini Trust have jointly filed a motion to pause their ongoing civil legal battle for 60 days. This request, made on Tuesday, aims to allow both parties to explore a potential resolution to the case. The SEC informed a New York federal judge that the requested time would facilitate discussions towards a resolution that is in the interest of the court and the public. The motion, signed by attorneys from both sides, emphasized that resolving the case would conserve judicial resources. However, it did not specify whether the resolution would involve a settlement or dismissal.

Gemini Earn, a lending program offered by Gemini, promised high interest rates to investors who lent crypto assets to Genesis, a unit of Digital Currency Group. Gemini earned fees that could exceed 4%. However, Genesis Global had to freeze customer withdrawals in November 2022, leading to a Chapter 11 bankruptcy filing in January 2023. Over $1 billion was frozen when Genesis halted redemptions. In January, Gemini agreed to pay $5 million to settle a case with the Commodity Futures Trading Commission (CFTC), which accused the exchange of misleading statements when trying to get their Bitcoin futures contract approved.

According to the motion, the parties will provide a joint status update within 60 days of the request, after approval. This development comes after the SEC dropped several enforcement actions in February, including those against Gemini, Robinhood Crypto, Coinbase, and Kraken. Gemini co-founder Cameron Winklevoss confirmed that the SEC had ended the investigation against the exchange without any charges, noting that the investigation alone cost Gemini "tens of millions of dollars in legal bills." Winklevoss called for "thoughtful legislation" to protect the industry and ensure accountability for those involved.