Key Highlights
- On September 15, the SEC agreed to settle its lawsuit against Gemini Trust Company, founded by the Winklevoss twins
- The settlement comes with Gemini’s successful Nasdaq IPO on September 12
- This is another major win for the crypto industry, marked by dropped cases against Coinbase, Kraken, and Ripple
U.S. regulators have agreed to settle their two-year legal case against Gemini, the crypto exchange founded by famous twin brothers Tyler and Cameron Winklevoss.
The settlement announcement comes just days after Gemini successfully became a publicly traded company on the Nasdaq stock exchange, achieving a valuation of $4.4 billion in its market debut.
INTEL: The US SEC has reached an agreement in principle to settle with the Winklevoss brothers’ trust over allegations it failed to register a crypto asset loan program
— Solid Intel 📡 (@solidintel_x) September 15, 2025
While the exact terms of the settlement remain confidential pending final approval from commissioners, experts familiar with such cases expect the penalty to be in the $10-20 million range. This is far less severe than initially feared and substantially lower than penalties imposed during the previous administration.
The settlement comes at a time of renewed optimism in the cryptocurrency market, with Bitcoin trading above $115,000 and many companies in the sector experiencing impressive growth.
Gemini’s successful public listing last week, where its stock jumped 32% on the first day of trading, shows that investor confidence remains strong despite past regulatory challenges.
The company’s transition to public markets represents a milestone for the industry, showing that crypto businesses can meet the rigorous requirements of traditional stock exchanges.
The resolution shows a recent shift in how American authorities are approaching cryptocurrency regulation under the new administration of pro-crypto President Donald Trump.
The timing highlights the dramatic turnaround in both the company’s fortunes and the regulatory landscape for digital assets.
Background of the SEC vs Gemini Case
The legal dispute centered around Gemini’s “Earn” program, a service launched in 2021 that allowed users to lend their cryptocurrency to institutional borrowers in exchange for interest payments.
According to the official document, the program ran into serious trouble during the 2022 cryptocurrency market downturn when Genesis Global Capital, Gemini’s lending partner, suddenly froze $900 million of customer funds following the collapse of the FTX exchange.
The U.S. Securities and Exchange Commission (SEC) subsequently sued Gemini, claiming the Earn program should have been registered as a securities offering and that the company failed to provide adequate disclosures about the risks involved.
The Winklevoss twins, who became billionaires through early Bitcoin investments after famously settling with Facebook over the creation of that platform, have positioned Gemini as a fully compliant and regulated exchange since its founding in 2014.
They obtained New York’s rigorous BitLicense in 2015, making Gemini one of the first exchanges to operate under strict state supervision. Tyler Winklevoss celebrated the settlement on social media, calling it “a win for innovation and a step toward regulatory clarity,” while emphasizing that the company’s commitment to compliance had been vindicated through the resolution.
This settlement represents part of a broader change in how U.S. regulators are approaching cryptocurrency. Under the new administration, the SEC has dropped several high-profile cases against crypto companies and is taking a more collaborative approach to regulation.
Crypto-friendly Regulations
This shift began when President Trump appointed crypto-friendly officials to lead the regulatory agency earlier this year, including new SEC chair Paul Atkins, who has advocated for clearer guidelines rather than enforcement actions.
The commission has established a Crypto Task Force to develop appropriate frameworks for digital assets and has paused numerous investigations into other major industry players.
The resolution of this case follows a similar pattern to other recent crypto settlements, including the SEC’s case against Ripple Labs, which also concluded with a reduced penalty and more favorable terms for the cryptocurrency company.
Industry analysts see these developments as signs that the U.S. is becoming more welcoming to cryptocurrency innovation while still maintaining appropriate consumer protections.
The regulatory approach appears to be evolving from viewing most digital assets as securities requiring strict registration to recognizing that different types of cryptocurrencies may need different regulatory treatments.
For the average cryptocurrency user, this settlement means that established companies like Gemini can continue operating with greater regulatory certainty.
It suggests that regulators are developing a more nuanced understanding of digital assets and creating frameworks that better suit this new technology rather than trying to force cryptocurrencies into existing regulations designed for traditional securities.
The resolution also provides hope for users affected by the Earn program freeze that they may eventually recover more of their funds as the company moves beyond its legal challenges.
