The US Securities and Exchange Commission (SEC) and the cryptocurrency exchange Gemini have requested a pause in the regulator’s lawsuit regarding the Gemini Earn program, expressing their desire to negotiate a possible resolution.
In a communication submitted to a federal court judge in New York, attorneys for the SEC and Genesis asked for a 60-day delay in the proceedings, stating that it would be beneficial for both parties to “explore a potential resolution.” They also requested that all deadlines be extended during this period.
“It is in the best interest of both parties to suspend the current proceedings while they consider a resolution, and we believe that no party or non-party would be adversely affected by such a delay,” the communication indicated.
The attorneys noted that granting a stay would serve the court’s interests as “a resolution would help conserve judicial resources” and suggested that a joint status update be provided within 60 days following the stay’s implementation.
The SEC initiated legal action against Gemini and the crypto lending company Genesis Global Capital in January 2023, accusing them of offering unregistered securities via the Gemini Earn program.
In March 2024, Genesis consented to a $21 million settlement concerning charges related to the lending platform, but the enforcement action against Gemini remains pending.
Letter from SEC and Genesis Global requesting extension of stay. Source: CourtListener
The communication did not clarify what form the potential resolution might take, though the SEC has previously dropped several lawsuits against crypto firms initiated during the Biden administration, including actions against Coinbase, Ripple, and Kraken.
Related: Could new US SEC regulations bring cryptocurrency companies onshore?
In February, Gemini announced that the SEC had concluded a separate investigation into the company, as the regulator scales back its crypto enforcement efforts that began under previous administration.
“The SEC has cost us tens of millions in legal fees and hundreds of millions in lost productivity and innovation. Gemini is certainly not alone in this,” said Cameron Winklevoss, co-founder of Gemini, at that time.
Other companies such as OpenSea, Crypto.com, and Uniswap have also reported that the SEC has recently closed similar investigations into their activities concerning alleged violations of securities laws.
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