Winklevoss twin-led Gemini is the latest crypto firm to shake off the U.S. Securities and Exchange Commission’s scrutiny, as the agency closed its probe after nearly two years.
According to co-founder Cameron Winklevoss, the commission has decided not to pursue enforcement action against Gemini nearly 700 days after launching its investigation and 277 days after issuing a Wells Notice.
Gemini was originally charged alongside Genesis Global Capital in January 2023 over its now-defunct Earn program, which the SEC claimed involved the sale of unregistered securities. The program allowed users to lend crypto assets in exchange for yield but collapsed after Genesis halted withdrawals during the 2022 bear market.
Though the case is now closed, the SEC made it clear that this isn’t an official exoneration and left the door open for future action.
Winklevoss called the recent development a milestone in ending the “war on crypto” but argued that it does little to undo the “tens of millions of dollars in legal bills” and the broader setbacks inflicted on the industry.
“The SEC’s behavior in aggregate towards other crypto companies and projects cost orders of magnitude more and caused unquantifiable loss in economic growth for America,” he added.
Winklevoss didn’t stop at criticizing the SEC—he laid out a few ideas to prevent similar crackdowns in the future.
He called for reimbursement measures, arguing that companies caught in regulatory battles should be compensated three times their legal costs if an agency fails to establish clear rules before launching an investigation.
Further, he suggested a “dishonorable discharge” policy, where SEC officials involved in what he sees as baseless enforcement actions would be publicly fired, with their names and roles listed on the agency’s website.
Winklevoss also proposed an agency ban, where regulators who have “weaponized the law” would be permanently barred from holding government positions.
“Just like the SEC bars individuals from trading securities if they break the law, there should be a process that bars those like Gary Gensler who weaponize the law, as well those who participate in the weaponization, from ever being appointed to or hired by an agency again,” he added.
Under former SEC chair Gary Gensler, the agency took an aggressive stance against the crypto industry, bringing more than 100 enforcement actions against companies since 2021. His tenure saw lawsuits against major firms, including Coinbase, Binance, Ripple, and Kraken, over allegations of operating as unregistered securities platforms.
Gensler’s approach, often criticized as “regulation by enforcement,” led to legal battles that shaped the industry’s relationship with regulators.
Since Gensler’s departure in January, the SEC has begun dialing back its crypto litigation. Throughout February, the agency closed its investigations into Coinbase, OpenSea, Uniswap Labs, and Robinhood Crypto.
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