The U.S. Securities and Exchange Commission (SEC) has announced the closure of its investigation into the Gemini crypto exchange, operated by the Winklevoss twins. According to a notice shared by Gemini co-founder Cameron Winklevoss, the SEC informed their legal team on Monday that the investigation has concluded and, based on the information available, the agency will not recommend any enforcement action at this time.
This decision comes 699 days after the initiation of the investigation and 277 days after the SEC had issued a Wells Notice, signaling the potential for an enforcement action. While this decision provides relief for Gemini, it is important to note that the SEC’s notice does not exonerate the company. The agency clarified that its conclusion is not final, and the possibility remains that further action could be taken in the future.
The investigation had centered around Gemini’s “Earn” program, which the SEC had alleged involved the offering of unregistered securities through a partnership with crypto lending firm Genesis Global Capital.
A Long Battle with the SEC
In his statement, Cameron Winklevoss took to social media to reflect on the lengthy battle with the SEC and its impact on Gemini and the broader crypto ecosystem. He opened u[ about the immense legal costs incurred, amounting to tens of millions of dollars, as well as the broader economic losses resulting from the uncertainty caused by the SEC’s regulatory approach.
He lamented that while the SEC’s actions may have been framed as a protective measure, the agency’s conduct had significant negative consequences on American innovation, causing crypto talent to seek opportunities in other sectors.
However, he wrote, “So where do we go from here? It’s wholly unacceptable for an agency like the SEC to bully, harass, and attack a lawful industry and then decide one day to simply say we’re good and walk away. Unless there is a cost and price to be paid for this behavior, it will happen again.”
A Changing Regulatory Landscape
This development follows the SEC’s recent withdrawal of lawsuits against other major players in the crypto industry, including Coinbase, and the closure of investigations into OpenSea, Robinhood, and Uniswap. This move raises the possibility that the SEC may take similar actions with other high-profile cases, including the ongoing legal battle involving Ripple Labs.
