The Ongoing Fallout Between Gemini and the SEC
The U.S. Securities and Exchange Commission (SEC) may have concluded its investigation into Gemini, but the cryptocurrency exchange is far from finished with the regulatory body. On Wednesday, Cameron Winklevoss, co-founder and President of Gemini, took to X (formerly Twitter) to share that the SEC notified Gemini on Monday about its decision to close the investigation without filing any enforcement charges against the exchange.
Despite this seemingly anticlimactic resolution, Winklevoss expressed dissatisfaction, stating that the SEC’s withdrawal did little to address the significant harm caused to both Gemini and the broader cryptocurrency industry. He lamented, “The SEC has cost us tens of millions of dollars in legal fees alone and hundreds of millions in lost productivity, creativity, and innovation.” He further emphasized that the SEC’s overall approach to other crypto companies has resulted in even greater losses, contributing to a substantial decline in economic growth in the United States.
Winklevoss cautioned that without accountability for the SEC and the individual staff members involved in the investigations of Gemini and other crypto firms, there is a risk that other federal agencies could once again “bully, harass, and attack a lawful industry” and then simply walk away without consequences. He proposed a radical solution: any agency that “refuses to write rules before it opens an investigation or takes enforcement action” should be required to reimburse defendants for three times their legal expenses.
Additionally, Winklevoss called for public accountability, demanding that all SEC staff involved in the Gemini probe be terminated and that their “names, roles, and the actions they participated in be made public on the SEC website.” He asserted, “It should not be acceptable to unleash the full power of the U.S. government against emerging companies in a nascent industry, only to hide behind the anonymity of a government agency or to claim you were ‘just doing your job’ or ‘following orders.’ These individuals had a choice.”
Winklevoss stressed that SEC employees could have opted for reassignment or resignation instead of participating in what he deemed an unlawful campaign against a legitimate industry. He concluded, “They violated their oath and the agency’s mission to ‘make a positive impact on the U.S. economy, our capital markets, and people’s lives’ and instead facilitated an unjust war against a lawful industry.”
The SEC’s decision to drop its investigation into Gemini follows closely on the heels of similar dismissals regarding Uniswap Labs, Robinhood Crypto, and OpenSea. Earlier on the same day, the SEC also filed a joint motion to pause its litigation against the Tron Foundation and its founder, Justin Sun. This mirrors recent motions filed in its ongoing cases against prominent exchanges like Coinbase and Binance. As of now, the SEC has not responded to requests for comment from CoinDesk.
