SEC Closes Investigation Into Gemini Without Action: Winklevoss Reacts

The U.S. Securities and Exchange Commission (SEC) has officially closed its investigation into the crypto exchange Gemini without recommending enforcement action. Cameron Winklevoss, co-founder and president of Gemini, announced the news on Feb. 26, marking what he calls another milestone in the ongoing battle for regulatory clarity in the crypto industry. However, he believes the damage inflicted by the SEC’s scrutiny may already be irreversible.

The SEC’s decision to drop the investigation stems from its review of Gemini’s operations, including its controversial “Earn” program, which the regulator had previously accused of offering unregistered securities. Despite choosing not to pursue enforcement at this time, the SEC’s notice explicitly states that this outcome does not equate to an exoneration and does not preclude future actions against the exchange.

The investigation was part of a broader crackdown by the SEC, which charged Genesis Global Capital and Gemini in January 2023. The move was part of a wave of regulatory efforts aimed at ensuring compliance in the rapidly evolving digital asset sector.

Winklevoss Condemns SEC’s Actions

While the conclusion of the case may seem like a win for Gemini, Winklevoss argues that the SEC’s aggressive enforcement approach has already caused substantial harm.

Winklevoss stated:

The SEC cost us tens of millions of dollars in legal bills alone and hundreds of millions in lost productivity, creativity, and innovation.

He further emphasized that Gemini was not the only firm affected, citing similar investigations into other crypto companies that he believes have stifled economic growth and innovation in the U.S.

Winklevoss sees the SEC’s retreat as a step toward ending what he calls the "war on crypto." However, he warns that the regulatory uncertainty and legal battles have already deterred investment and driven innovation elsewhere.

“The damage has been done,” he remarked. “Many projects, developers, and entrepreneurs have already moved away from the space due to these regulatory attacks.”

To prevent such occurrences in the future, Winklevoss is calling for significant reforms in the SEC’s enforcement policies. He suggests that officials involved in “sham investigations” should face consequences, including termination and potential barring from future regulatory positions. He also advocates for reimbursement of legal expenses incurred by affected crypto firms.

The SEC’s stance on crypto has been a contentious issue, particularly under the leadership of former SEC Chair Gary Gensler, who resigned on Jan. 20, 2025—the same day crypto-friendly Donald Trump began his second term as U.S. president. Gensler had been widely criticized for his aggressive regulatory stance, leading to over 100 enforcement actions against crypto firms during his tenure.

With regulatory pressures easing, the crypto industry may now have an opportunity to push for more balanced and transparent legislation. Winklevoss remains hopeful that this marks the beginning of a more stable and constructive regulatory environment.

It’s wholly unacceptable for an agency like the SEC to bully, harass, and attack a lawful industry and then simply walk away. This is just the beginning of ensuring that what happened to the crypto industry never happens again to any emerging sector in the future.

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