SEC and Gemini Trust Seek a 60-day Delay in $900M Lawsuit

The U.S. Securities and Exchange Commission (SEC) and Gemini Trust have jointly filed a motion requesting a 60-day stay in their ongoing legal dispute, signaling a potential avenue for resolution.

The motion, submitted to the U.S. District Court for the Southern District of New York on April 1, seeks a temporary suspension of all deadlines to facilitate further negotiations between the parties.

SEC and Gemini Seek 60 Day Reprieve

The SEC started a case in January 2023 against Gemini Trust and Genesis Global Capital. They say the companies broke the law by raising billions of dollars through the Gemini Earn program. The SEC claims the program should have been registered as a security.

Notably, the filing does not say whether the talks are about a deal, ending the case, or something else. However, the SEC and Gemini Trust agreed that stopping the case for now is best. It allows them to talk and saves the court time. If the court agrees, the SEC and Gemini must provide an update within 60 days.

Gemini agreed to give back $2.18 billion to customers in a deal with New York regulators. This shows they are trying to fix problems with the Gemini Earn program.

Genesis, which handled $900 million from 340,000 Gemini Earn customers before stopping withdrawals in November 2022, settled its part of the case in February 2024. They agreed to pay a $21 million fine.

SEC 2.0 Optimistic Changes

Since President Donald Trump took office, there seems to be a change in how crypto regulations are enforced. The SEC, led by acting Chair Mark Uyeda, has stopped legal threats against companies like Robinhood, Uniswap, Immutable, and OpenSea. Additionally, the SEC has dropped cases against big crypto companies like Coinbase and Kraken. This may show a new way of doing things.

The change is good news for many in the crypto industry. Under former SEC head Gary Gensler, the industry faced tough rules. The Winklevoss twins, who started Gemini, along with several other prominent members of the crypto community want easier crypto rules. Notably, the Winklevoss twins gave the most they could, $844,600, to Trump’s 2024 campaign.

The request to stop the SEC’s lawsuit against Gemini could be a big deal for crypto regulation. While it is unclear if it will fix things, working together to ask for a break shows that both sides might want to find other ways to solve the problem.