SEC, Gemini Seek 60-Day Pause on $900M Crypto Lending Case

The Securities and Exchange Commission and Gemini Trust jointly filed a motion Tuesday requesting a 60-day pause in their high-profile legal battle over the exchange’s crypto lending program.

Filed in Manhattan federal court, the motion asks to suspend all deadlines in the SEC’s January 2023 lawsuit.

The lawsuit had alleged that the Winklevoss twins’ exchange failed to register their Gemini Earn program before offering it to retail investors.

The joint letter was sent “to allow the parties to explore a potential resolution,” the April 1 filing reads, signed by attorneys from both sides.

Doing so “is in the Court’s and the public’s interest” because reaching a resolution “would conserve judicial resources.”

Notably, the motion did not specify whether that “potential resolution” would involve a settlement, dismissal, or a different agreement.

If the motion to stay gets granted, both parties proposed submitting a joint status report within the 60-day pause.

Earlier in February, the SEC signaled that it was softening its stance and cleared Gemini from its previous probe.

Decrypt has reached out to Gemini and SEC representatives but did not receive responses by press time.

From frosty reception to clearer signals

The request aligns with the rapid dismantling of crypto enforcement actions and cases since President Donald Trump took office in January.

Former SEC Chair Gary Gensler had previously branded crypto markets the “Wild West” during his tenure under Biden, pursuing numerous enforcement actions leveled against major industry players.

Genesis, which held $900 million from approximately 340,000 Gemini Earn customers in 2022, agreed to pay a $21 million fine in February 2024 to settle its portion of the case, as Gensler pushed ahead to police the industry.

The lender halted customer withdrawals in November 2022 amid market turmoil following FTX’s collapse and filed for bankruptcy two months later.

Under acting Chair Mark Uyeda, the SEC has dropped cases against Coinbase and Binance and has withdrawn legal threats against Robinhood, Uniswap, and OpenSea, among other crypto firms.

Edited by Sebastian Sinclair