SEC and Gemini Reach Tentative Settlement Over Dispute on Crypto Lending Program

Highlights:

• The Gemini Earn collapse left customer funds stranded after Genesis froze withdrawals.
• Settlement talks follow the Gemini IPO, which raised $425 million and lifted shares 16% above the debut price.
• The SEC and Gemini case outcome may shape future rules for crypto lending products and investor disclosures.

According to a filing in Manhattan federal court, the U.S. Securities and Exchange Commission and Gemini have agreed to a resolution “in principle” that could end a long-running dispute over the company’s crypto lending program. Lawyers from both sides asked Judge Edgardo Ramos to pause case deadlines until December 15 while the parties finalize paperwork. The filing did not disclose settlement terms and noted that final approval must come from the SEC.

🔔 @SECGov, @Gemini Reach Resolution in Principle Over Crypto Lending Case !

The U.S. SEC and #Gemini Trust Co. said they’ve reached a resolution in principle to settle the regulator’s lawsuit, which alleged Gemini’s crypto lending program raised billions through unregistered… pic.twitter.com/1089UiQW7M

— Altcoin Alerts (@Altcoin_Alerts) September 16, 2025

The case centers on Gemini Earn, a product that allowed customers to lend Bitcoin and other digital assets to Genesis Global Capital in exchange for interest. The program generated up to 4.29% fees to Gemini, which was used by hundreds of thousands of users at its height. The situation got rocky when Genesis halted withdrawals after the bankruptcy of FTX. Genesis applied for bankruptcy with an estimated number of 340,000 Gemini Earn users and approximately 900 million in customer money left stranded.

The SEC filed suit against Gemini and Genesis, alleging that they were offering unregistered securities and had not made the disclosure required to protect investors. Genesis later agreed to pay $21 million to resolve its part of the case without admitting wrongdoing. Gemini, however, continued to fight the charges until the court filing this week indicated progress toward a settlement.

Settlement Talks Follow Gemini’s IPO and Rising Market Position

The tentative deal comes as Gemini moves forward with its public listing. The company completed its initial public offering earlier this month, raising $425 million at a $3.3 billion valuation. Its shares opened at $28 and have since climbed to $32.52, a 16% increase. The offering marked a significant step for the exchange, which has operated since 2014 as both a trading platform and custodian for digital assets.

JUST IN: 🚀 @Gemini, a global crypto platform, closed its IPO with 15,937,501 Class A shares at $28 each. Only Gemini receives proceeds for its shares. The stock began trading as "GEMI" on Nasdaq Sept 12, 2025. Major financial firms were bookrunners. $GEMI pic.twitter.com/bgTandAgqR

— Treasury Stocks (@TreasuryStocks) September 15, 2025

The Winklevoss twins, Tyler and Cameron, who co-founded Gemini, now each hold an estimated net worth of $4.6 billion. The settlement, if finalized, could remove one of the biggest hurdles facing the exchange as it attempts to strengthen its market position as a publicly traded company.

The political environment has also shifted in recent months. Since President Donald Trump took office in January, the SEC has eased oversight of the crypto sector. The agency, now led by Paul Atkins, launched “Project Crypto” to modernize its approach toward digital assets. Lawsuits against several large firms, including Coinbase, Binance, and Ripple, have been dropped under the new direction.

SEC and Gemini Case Could Influence Future of Crypto Lending

The case of the Earn program has served as a major test to the treatment of yield-generating products in the digital asset sector. The SEC has claimed that the programs are similar to securities contracts due to the guarantee of returns on deposits. Industry leaders, however, maintain that such services operate more like traditional lending arrangements.

The settlement process requires multiple steps. The parties are required to provide a signed settlement offer after reaching an agreement in principle. The SEC staff will then review and send it over to the Commission, which will vote to approve or dismiss it. In case the Commission approves, the case is closed. If not, litigation resumes.