SEC dismisses lawsuit against billionaire Winklevoss twins-backed Gemini over Earn product

Core Viewpoint - The U.S. Securities and Exchange Commission (SEC) has agreed to dismiss a lawsuit against crypto exchange Gemini related to its Earn product, stating that the lawsuit is no longer warranted [1]. Group 1: Lawsuit Background - The SEC initially sued Gemini and Genesis Global Capital in 2023, alleging the sale of unregistered securities through Gemini's yield-bearing Earn product, which led to investor funds being loaned to Genesis [2]. - Following the 2022 FTX collapse and a downturn in the crypto market, Genesis halted withdrawals, prompting the SEC's lawsuit [2]. Group 2: Settlement and Dismissal - In a recent court filing, the SEC and Gemini reached a joint stipulation, confirming that Gemini had repaid 100% of its investors' funds through the bankruptcy process of Genesis [3]. - The SEC's filing indicated that the dismissal of claims against Gemini was appropriate due to the full return of investors' crypto assets [4]. Group 3: Related Developments - Genesis has settled with the SEC, agreeing to pay a $21 million fine, while Gemini has also settled with New York state regulators [5]. - The dismissal of this lawsuit is part of a broader trend, as the SEC has dropped over a dozen lawsuits in the past year, many initiated during the previous administration [5]. Group 4: Regulatory Context - Current SEC Chair Paul Atkins has indicated plans to publish new guidelines for crypto companies to determine whether their products qualify as securities, which is a key issue in ongoing legislative discussions in the Senate [6].