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Date: 2025-02-27 07:13:15
The cryptocurrency firm Gemini, led by the Winklevoss twins, has recently managed to evade the scrutiny of the U.S. Securities and Exchange Commission (SEC), as the agency concluded its nearly two-year investigation without taking any enforcement action.
As stated by co-founder Cameron Winklevoss, the SEC has chosen not to pursue any legal proceedings against Gemini, approximately 700 days after initiating the investigation and 277 days after issuing a Wells Notice.
On Monday, the SEC informed our litigation counsel @JackBaughman27 that it has closed its investigation into @Gemini and will not be pursuing an enforcement action against us. This comes 699 days after the start of their investigation and 277 days after they sent us a Wells…
Gemini faced charges along with Genesis Global Capital in January 2023 due to its now-defunct Earn program. The SEC claimed that the program involved the sale of unregistered securities. The program enabled users to lend cryptocurrencies in exchange for yield, but it collapsed following Genesis' suspension of withdrawals during the 2022 bear market.
Despite closing the case, the SEC made it clear that this does not constitute an official exoneration and left open the possibility for future action.
Winklevoss considered the recent development a significant step towards ending the "war on crypto," but argued that it fails to rectify the "tens of millions of dollars in legal bills" and the broader setbacks suffered by the industry.
"The SEC's overall behavior towards other cryptocurrency companies and projects cost significantly more and resulted in an immeasurable loss in economic growth for America," he added.
Winklevoss did not limit his criticism to the SEC alone; he also proposed several measures to prevent similar crackdowns in the future.
He advocated for reimbursement policies, arguing that companies embroiled in regulatory disputes should be compensated three times their legal costs if an agency fails to establish clear rules before initiating an investigation.
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Moreover, he suggested a "dishonorable discharge" policy, in which SEC officials involved in baseless enforcement actions would be publicly dismissed, 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 as those who participate in the weaponization, from ever being appointed to or hired by an agency again," he added.
During Gary Gensler's tenure as the former SEC chair, the agency adopted an aggressive stance against the cryptocurrency industry, initiating over 100 enforcement actions against companies since 2021. Lawsuits were filed against major firms such as Coinbase, Binance, Ripple, and Kraken for allegedly operating as unregistered securities platforms.
Gensler's approach, often criticized as "regulation by enforcement," led to legal battles that influenced the industry's relationship with regulators.
Since Gensler's departure in January, the SEC has started to reduce its cryptocurrency-related litigation. Throughout February, the agency closed its investigations into Coinbase, OpenSea, Uniswap Labs, and Robinhood Crypto.