Winklevoss Exchange Gemini and SEC May Settle Soon

Gemini may be nearing a resolution with the U.S. Securities and Exchange Commission (SEC) over a lawsuit tied to its discontinued crypto lending program. The crypto exchange, launched by Cameron and Tyler Winklevoss, is working with the SEC to pause legal proceedings while both sides explore a possible settlement.

The dispute began in January 2023 when the SEC filed a complaint against Gemini and Genesis Global Capital. Regulators accused both companies of violating securities laws through the Gemini Earn program. That product let users lend their crypto in exchange for interest payments.

The lawsuit came soon after Genesis froze customer withdrawals in November 2022, leaving around $900 million in user assets inaccessible.

Now, both parties have filed a joint letter with the U.S. District Court for the Southern District of New York. They’ve asked Judge Edgardo Ramos to pause the case for 60 days. The goal is to give each side more time to discuss a potential agreement.

“The parties submit that it is in each of their interests to stay this matter while they consider a potential resolution and agree that no party or non-party would be prejudiced by a stay,” the letter stated. “Further, a stay is in the Court’s and the public’s interest because a resolution would conserve judicial resources.”

Gemini and the SEC also outlined a plan to update the court after the 60-day period.

“The parties respectfully request that the Court grant this joint request for a 60-day stay. The parties propose that they will submit a joint status report within 60 days after entry of the stay.”

Gemini Earn, once marketed as a way to earn yield from crypto assets, became a focus for regulators after the collapse of crypto lending platforms raised concerns about investor risk and legal compliance. The fallout from Genesis’s halt on withdrawals in late 2022 was one of several events that triggered lawsuits and investigations across the crypto space.