The US Securities and Exchange Commission (SEC) and Gemini have requested a pause on the watchdog’s lawsuit against the crypto exchange over its Earn program. This move follows the regulator’s efforts to resolve most major crypto litigations outside of the Court.
SEC And Gemini Ask For Pause
On April 1, the US SEC and crypto exchange Gemini sent a letter to New York federal court judge Edgardo Ramos asking for a pause on the regulator’s lawsuit to “allow the parties to explore a potential resolution.”
In the joint motion to stay, the Commission and Gemini lawyers requested a 60-day stay of all the deadlines in the case to discuss the potential resolution, adding that it is in the Court’s best interest as it “would conserve judicial resources.”
The SEC sued Gemini in January 2023, arguing that the exchange and the crypto lending firm Genesis Global Capital had illegally offered unregistered securities through the crypto exchange’s Earn Program.
In February 2024, Gemini agreed to pay at least $1.1 billion to the Earn program customers as part of a settlement with the New York State Department Of Financial Services (NYDFS).
“In this case, the parties submit that it is in each of their interests to stay this matter while they consider a potential resolution and agree that no party or non-party would be prejudiced by a stay,” the Tuesday letter argues. The parties also proposed submitting a joint status report within 60 days after entry of the stay.
The End Of The SEC’s Crackdown?
Nearly two months ago, the SEC and Binance also sent a joint motion for a 60-day stay on their crypto litigation, arguing that a stay due to the creation of the SEC’s Crypto Task Force, led by SEC Commissioner Hester Peirce.
The two parties considered that the Task Force could “impact and facilitate the potential resolution of this case.” Journalist Eleanor Terret noted that after the request to pause the Binance case, more joint motions to stay would likely follow under the new crypto-friendly administration.
Since then, the Commission has dropped several crypto cases, including Coinbase, Kraken, and Consensys. Additionally, it had closed multiple open investigations with no enforcement action taken against Robinhood, Uniswap Labs, Crypto.com, and Gemini, among others.
As reported by Bitcoinist, Gemini co-founder Cameron Winklevoss revealed on February 26 that the SEC officially closed its investigation into the company without any enforcement action “699 days after the start of their investigation and 277 days after they sent us a Wells Notice.”
Winklevoss criticized the Commission’s tactics over the previous administration, affirming that, “While this marks another milestone to the end of the war on crypto, (…) it does little to make up for the damage this agency has done to us, our industry, and America.”
He concluded that this is just the beginning “towards ensuring this never happens again to the crypto industry or any other exciting, new frontier industry in the future.”
