An exchange run by billionaire twins Tyler and Cameron Winklevoss may soon resolve a U.S. Securities and Exchange Commission lawsuit alleging that they failed to register a cryptocurrency asset lending program before offering it to retail investors.
In a joint letter filed in Manhattan federal court, Gemini Trust and the SEC requested to pause all deadlines in the civil case for 60 days to allow both parties to explore a potential resolution.
The letter did not specify whether this might involve a settlement, the SEC dropping its case, or another outcome.
Neither the attorneys for Gemini nor the SEC responded immediately to requests for comment.
The SEC filed suit against Gemini and cryptocurrency lender Genesis Global Capital in January 2023 over Gemini Earn, a service that allowed customers to lend crypto assets, including Bitcoin, to Genesis in exchange for interest payments, with Gemini taking a fee of up to 4.29%.
Genesis halted withdrawals in November 2022, coinciding with the collapse of Sam Bankman-Fried's FTX cryptocurrency exchange, and filed for bankruptcy two months later. At that time, it held $900 million in assets from approximately 340,000 Gemini Earn customers.
The SEC contended that by creating Gemini Earn, Genesis and Gemini bypassed necessary disclosure requirements meant to protect investors.
In March 2024, Genesis agreed to a settlement, pending the resolution of claims in its Chapter 11 case, without admitting any wrongdoing. Gemini has denied any misconduct.
The SEC has eased its oversight of the cryptocurrency industry since Donald Trump took office and is expected to continue a more supportive approach than under the Biden administration.
Recently, the SEC has dropped civil lawsuits against crypto exchanges Coinbase and Kraken, and reached a settlement with cryptocurrency company Ripple Labs over the unregistered sale of securities.
Tyler and Cameron Winklevoss are each estimated to have a net worth of $3 billion according to Forbes magazine.