SEC Seeks a 60-Day Delay in the Gemini Lawsuit, hinting at a possible resolution.

Both SEC and Gemini agree pause may help in settlement, dismissal, or resolution

The U.S. Securities and Exchange Commission (SEC) has requested a 60-day stay in its lawsuit against Gemini, hinting at a possible resolution in the case.

Both the SEC and Gemini Trust have agreed that a brief pause may be beneficial to explore avenues for settlement, dismissal, or another resolution of the action.

The SEC sued Gemini in 2023, alleging that the crypto exchange had illegally raised billions of dollars from investors through its Gemini Earn program. Meanwhile, Gemini had already settled with New York regulators, promising to return at least $1.1 billion to customers.

However, the SEC is now asking a New York court to stay the case for two months, as revealed in a joint motion with Gemini.

If the court grants the request, both Gemini and the SEC will submit a joint status report to the court within 60 days of the stay.

The SEC is also asking the court to administratively close the case, to be reopened if necessary.

Both parties have agreed that a stay of the action at this time would be helpful to explore avenues for settlement, dismissal, or another resolution of the action.

The SEC is seeking to stay the case to engage in administrative settlement discussions with Gemini.

The parties believe that a stay of no more than 60 days would be useful to determine whether the action can be resolved without further litigation.

After the 60-day stay, both parties will submit a joint status report to the court.

The SEC announced in July that it was dropping its appeal of a court ruling that threw out part of its lawsuit against blockchain startup Ripple.

A federal judge in New York had ruled that the SEC failed to sufficiently notify Ripple of the legal claims.

The SEC sued Ripple in December 2020 for allegedly selling unregistered securities in the form of its XRP token to raise $1.3 billion from investors.

The agency had argued that Ripple’s XRP token should have been registered with the SEC as a security.

However, Judge Robert Morgenthaler ruled that the SEC’s claims were not sufficiently clear and that the agency had not adequately notified Ripple of the legal issues in a timely manner.

As part of the ruling, Morgenthaler also threw out the SEC’s claims that a former president of Ripple had engaged in fraud.

The SEC announced last month that it was dropping its appeal of Morgenthaler’s ruling.

In a joint motion with Ripple, lawyers for the SEC said they had reached an agreement to dismiss the case with prejudice, meaning it cannot be brought again.

The SEC’s decision to drop the appeal comes after it had already lost several key cases against crypto firms this year.

In June, the SEC dropped its lawsuit against crypto exchange platform Uniswap after a federal judge ruled that the agency had no claim to pursue.

The SEC had sued Uniswap for allegedly facilitating the sale of unregistered securities on its platform.

However, Judge Mark Ferguson ruled that Uniswap’s activities were more akin to those of an exchange, which are not subject to the same registration requirements.

The SEC also dropped its lawsuit against Immutable and OpenSea after both firms reached a settlement with the agency.

The SEC had sued Immutable for allegedly offering unregistered securities through its platform and OpenSea for allegedly facilitating the sale of stolen crypto art on its marketplace.

In May, the SEC dropped its lawsuit against crypto startup Acala after the firm reached a settlement with the agency.

The SEC had sued Acala for allegedly offering unregistered securities through its platform and failing to register as a crypto exchange.

The agency’s move to drop the case comes as it is facing increasing pressure from Congress to provide clarity on crypto regulations.

Lawmakers have criticized the SEC for being too slow to adapt to the rapidly evolving crypto sector.

In April, a bipartisan group of U.S. lawmakers introduced legislation that would grant the Commodity Futures Trading Commission (CFTC) primary authority to oversee crypto exchanges.

The bill, known as the Digital Commodities Exchange Act, would also require crypto exchanges to register with the CFTC and comply with the agency’s rules.

The CFTC is already authorized to regulate commodities derivatives, such as futures and options.

However, the SEC currently has authority over the registration and offering of securities.

The move came after the SEC announced in March that it was shutting down its case against crypto firm Kraken.

The SEC had sued Kraken in February for allegedly operating a crypto exchange without registering with the agency and offering unregistered securities to U.S. retail investors through its Gemini Earn crypto lending product.

As part of the settlement, Kraken agreed to pay $1.27 billion to settle the SEC’s claims.

The SEC’s case against Gemini focused on the crypto exchange’s Gemini Earn program, which allowed users to lend their crypto to institutional borrowers in exchange for interest payments.

The SEC argued that Gemini should have registered the Gemini Earn program as a securities offering and that it had failed to properly disclose the risks