Gemini Trust and the United States Securities and Exchange Commission (SEC) are pausing their ongoing lawsuit to explore a potential resolution. The two parties have jointly requested a 60-day stay, which would postpone all deadlines while they continue discussions.
This development is the latest twist in a lawsuit that began in January 2023. The SEC accused Gemini Trust and Genesis Global Capital of unlawfully raising billions of dollars through the Gemini Earn program without registering it as a securities offering.
The SEC’s Case Against Gemini
The SEC’s complaint centers on the Gemini Earn program, which allowed investors to lend their crypto assets to Genesis, another crypto lending firm, in exchange for interest payments. However, the SEC alleged that the program constituted an offer and sale of securities, which should have been registered with the Commission.
The lawsuit was part of the SEC’s broader crackdown on crypto firms under the Biden administration’s regulatory push. The company had previously agreed to return $2.18 billion to affected customers as part of a separate settlement with New York regulators. However, Gemini’s case is ongoing, with the court delaying proceedings for 60 days to allow for a potential resolution.
A Welcome Regulatory Shift
The joint request for a stay in the Gemini Trust case comes as the Trump administration takes a softer approach to regulating crypto. Under acting SEC Chair Mark Uyeda, the regulatory watchdog has withdrawn threats against major crypto companies and dropped lawsuits.
This shift is a departure from the strict enforcement under former SEC Chair Gary Gensler, a change that has been welcomed by crypto industry players. The SEC’s new approach promotes innovation and growth while protecting investors, as seen in withdrawn threats against Robinhood and dropped lawsuits against Coinbase.
Recently, the regulatory watchdog decided to bring a four-year lawsuit against Ripple Labs to an end. This landmark decision marks a significant milestone in the crypto industry and sets a crucial precedent for regulating digital assets in the U.S
