Cameron Winklevoss Slams US SEC After Dropping Lawsuit Against Gemini

The US Securities and Exchange Commission (SEC) has ended its investigation into Gemini without filing any charges. However, Gemini co-founder Cameron Winklevoss has strongly criticized the agency, accusing it of causing financial and operational harm to the crypto industry.

US SEC Ends Gemini Investigation Without Charges

On Monday, the US SEC informed Gemini’s legal team that it had closed its probe into the cryptocurrency exchange. The investigation lasted 699 days, and the agency had previously issued a Wells Notice to Gemini 277 days ago. Despite the SEC’s decision to drop the case, Winklevoss expressed frustration, arguing that the prolonged scrutiny harmed the company and the broader industry.

“This comes 699 days after the start of their investigation and 277 days after they sent us a Wells Notice,” Winklevoss said in a post on X. “The SEC cost us tens of millions of dollars in legal bills alone and hundreds of millions in lost productivity, creativity, and innovation.”

The US SEC has not provided a public statement on the decision to end its investigation. The case was part of a broader regulatory crackdown on cryptocurrency firms, which also included actions against other major industry players.

Winklevoss Demands Accountability from the SEC

Following the SEC’s decision, Winklevoss called for accountability, stating that regulators should face consequences for what he described as an unjustified crackdown. He argued that the agency’s actions had created unnecessary legal costs and stifled innovation in the United States.

“Unless there is a cost and price to be paid for this behavior, it will happen again,” he stated. He also called for the public dismissal of SEC staff involved in the investigation. “Everyone involved in these actions should be fired immediately and in a public way. Their names, roles, and the actions they participated in should be posted.”

Winklevoss suggested that regulatory agencies that launch investigations without clear rules should be required to reimburse legal expenses at three times the actual cost. He also proposed banning certain US SEC employees from working in government agencies in the future.

SEC Withdraws Multiple Crypto Investigations

The SEC’s decision to drop its probe into Gemini is part of a broader pattern of withdrawn enforcement actions. In the past week, the agency under leadership of acting chair Mark Uyeda has also ended investigations into Uniswap Labs, Robinhood Crypto, and OpenSea. The SEC has also paused its lawsuit against the Tron Foundation and its founder, Justin Sun.

This shift in regulatory approach follows a period of increased scrutiny under former SEC Chair Gary Gensler, who led aggressive enforcement actions against cryptocurrency companies. The SEC’s recent moves suggest a change in direction, though the agency has not publicly explained its reasoning.

Gemini was previously involved in a separate settlement with the SEC in March 2023, where it agreed to pay $21 million in fines over its Gemini Earn program. The program, which allowed users to earn interest on their crypto holdings, was accused of selling unregistered securities.

The SEC’s decision to drop multiple cases has sparked debate within the cryptocurrency industry. Some argue that it signals a more cooperative approach from regulators, while others remain skeptical. Moreover, some lawyers like Fred Rispoli have criticized the US SEC on the basis of the Ripple vs SEC lawsuit delay saying the settlement is simple and possible but they are taking time.

Winklevoss and other industry figures believe that past regulatory actions have harmed innovation and economic growth in the US.

“How many years of innovation were kicked down the road at the expense of Americans? We will never know,” Winklevoss stated.