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From Frosty Reception to Clearer Signals
The Securities and Exchange Commission (SEC) and Gemini Trust have jointly filed a motion to pause their high-profile legal battle over the exchange’s crypto lending program. The motion, filed in Manhattan federal court, requests a 60-day stay to allow the parties to explore a potential resolution.
The lawsuit, which was filed in January 2023, had alleged that the Winklevoss twins’ exchange failed to register their Gemini Earn program before offering it to retail investors. The motion seeks to suspend all deadlines in the SEC’s lawsuit.
The joint letter was sent “to allow the parties to explore a potential resolution,” the April 1 filing reads, signed by attorneys from both sides. This motion is in the court’s and the public’s interest, as reaching a resolution would conserve judicial resources.
Notably, the motion did not specify whether that “potential resolution” would involve a settlement, dismissal, or a different agreement. If the motion to stay gets granted, both parties proposed submitting a joint status report within the 60-day pause.
Earlier in February, the SEC signaled that it was softening its stance and cleared Gemini from its previous probe. Decrypt has reached out to Gemini and SEC representatives but did not receive responses by press time.
From Frosty Reception to Clearer Signals
The request aligns with the rapid dismantling of crypto enforcement actions and cases since President Donald Trump took office in January. The SEC has dropped cases against Coinbase and Binance and has withdrawn legal threats against Robinhood, Uniswap, and OpenSea, among other crypto firms.
Genesis, which held $900 million from approximately 340,000 Gemini Earn customers in 2022, agreed to pay a $21 million fine in February 2024 to settle its portion of the case, as Gensler pushed ahead to police the industry. The lender halted customer withdrawals in November 2022 amid market turmoil following FTX’s collapse and filed for bankruptcy two months later.
Under acting Chair Mark Uyeda, the SEC has dropped cases against Coinbase and Binance and has withdrawn legal threats against Robinhood, Uniswap, and OpenSea, among other crypto firms.
Conclusion
The joint motion filed by the SEC and Gemini Trust is a significant development in the ongoing legal battle over the exchange’s crypto lending program. The motion seeks to pause the legal proceedings for 60 days to allow the parties to explore a potential resolution. The outcome of this motion will have significant implications for the crypto industry and its regulatory landscape.
FAQs
Q: What is the purpose of the joint motion filed by the SEC and Gemini Trust?
A: The joint motion seeks to pause the legal proceedings for 60 days to allow the parties to explore a potential resolution.
Q: What is the significance of the joint motion in the context of the crypto industry?
A: The joint motion has significant implications for the crypto industry and its regulatory landscape, as it may impact the future of crypto lending programs and the relationship between crypto exchanges and regulatory bodies.
Q: What is the current status of the legal proceedings in the case?
A: The current status of the legal proceedings is that the joint motion is pending, and the court has yet to rule on the request.
