SEC Drops Gemini Lawsuit as Crypto Enforcement Softens Under Trump Administration

The U.S. Securities and Exchange Commission’s decision to dismiss its civil lawsuit against Gemini Trust Company marks another high-profile retreat from aggressive crypto enforcement, signaling a broader regulatory reset under the Trump administration that could reshape the industry’s long-term outlook.

Court filings show that the SEC and Gemini, along with lending partner Genesis Global Capital, submitted a joint stipulation on Friday to dismiss the case with prejudice in the U.S. District Court for the Southern District of New York. Once approved by a federal judge, the dismissal will permanently close the agency’s claims that Gemini’s Earn program involved the sale of unregistered securities.

The move adds to a growing list of crypto-related cases that U.S. regulators have either dropped or resolved since the administration took office in January 2025, following campaign promises to roll back what industry leaders have described as “regulation by enforcement.”

Gemini’s case is the latest sign of a noticeable shift in tone from U.S. regulators after years of heightened scrutiny during the Biden administration, when lawsuits and investigations against crypto firms surged.

Since early 2025, enforcement actions against several major crypto players — including Binance, Kraken, Uniswap, Immutable and Robinhood — have been paused, dismissed or quietly wound down. Earlier this week, the Department of Justice also dropped its NFT insider trading case against former OpenSea executive Nathaniel Chastain after an appeals court overturned his convictions.

Taken together, these developments suggest a recalibration of how U.S. authorities approach digital assets, with greater emphasis on market stability, investor restitution and regulatory clarity rather than prolonged courtroom battles.

For the crypto industry, the shift could reduce legal uncertainty and encourage renewed institutional participation, particularly after years of compliance costs and stalled innovation driven by regulatory risk.

How the Gemini Case Was Resolved

The SEC’s decision to dismiss the Gemini lawsuit came after Gemini Earn Investors received a 100% in-kind recovery of their crypto assets through the bankruptcy process which concluded in mid 2024.

Gemini also agreed to contribute up to $40 million to help fund the full return of customer assets, a factor the agency cited in supporting the dismissal. Genesis, meanwhile, had already settled with the SEC, agreeing to pay a $21 million civil penalty.

The case was originally filed in January 2023, alleging that Gemini and Genesis violated securities laws by offering unregistered investment products. The SEC paused proceedings in April 2024 under then-acting Chair Mark Uyeda, setting the stage for the eventual dismissal announced this week.

What It Means for Crypto Going Forward

While the dismissal does not establish new legal precedent, it reinforces the perception that U.S. regulators are moving away from sweeping enforcement actions in favor of negotiated resolutions and investor recovery.

For crypto companies operating in the U.S., the Gemini outcome may serve as a roadmap for resolving legacy disputes — particularly those tied to bankruptcies and customer losses — as the regulatory environment continues to evolve.

At the same time, policymakers have cautioned that deregulation does not equate to a free pass, and future oversight is expected to focus more narrowly on fraud, market manipulation and consumer harm rather than broad-based challenges to crypto business models.