The US Securities and Exchange Commission (SEC) has closed its investigation into the cryptocurrency exchange Gemini without taking any legal action.
This decision is part of a recent shift in the SEC’s approach, as the agency has also dropped cases against other crypto firms, including OpenSea, Robinhood, and Uniswap.
However, Gemini’s co-founder, Cameron Winklevoss, is not satisfied. He believes the SEC’s actions over the past two years have caused serious damage to his company and the crypto industry as a whole.
Winklevoss is now calling for regulators involved in these investigations to be held accountable, including financial penalties and job dismissals.
The SEC first began investigating Gemini nearly two years ago. In January 2023, the agency accused the company, along with its business partner Genesis Global Capital, of offering unregistered securities through Gemini’s Earn program.
At the time, the SEC argued that the companies misled investors by promoting returns of up to 8% without properly registering as a lending platform.
Nearly a year after the initial charges, the SEC sent Gemini a Wells Notice, which is a formal warning that an enforcement action might be coming.
However, no lawsuit was ever filed. Now, after months of uncertainty, the SEC has informed Gemini that the case is officially closed and that no charges will be pursued.
This decision is part of a larger trend. Since the departure of former SEC Chair Gary Gensler in January 2025, the agency has been stepping back from its aggressive crackdown on crypto firms.
Under its new leadership, the SEC has settled its case with Coinbase, delayed its lawsuit against Ripple, and entered discussions to resolve a fraud case against Tron’s founder, Justin Sun.
While Gemini sees this as a positive step, the SEC made it clear that the case’s closure does not guarantee that new investigations won’t be launched in the future.
The agency stated that “based on the information we have as of this date, we do not intend to recommend an enforcement action”. However, it also warned that this should not be seen as proof that Gemini is completely in the clear.
Winklevoss blames the SEC
Despite the case being dropped, Cameron Winklevoss remains angry about how the SEC handled the investigation. In a lengthy post on X, he revealed that Gemini had spent nearly 700 days under investigation, and it had been almost 280 days since the company received the Wells Notice.
Winklevoss believes the SEC’s actions have cost his company tens of millions of dollars in legal fees and harmed its ability to innovate.
He also argues that the regulatory uncertainty has driven away entrepreneurs and developers from the crypto space, making it harder for the US to compete with other countries that have clearer rules.
“The SEC’s behaviour has caused enormous damage to us, our industry, and the US economy”, Winklevoss said. “Hundreds of millions of dollars in lost productivity, creativity, and innovation”, he added.
He also pointed out that while the SEC dropped its case, Gemini still had to pay a $5 million fine to the Commodity Futures Trading Commission (CFTC), while its partner Genesis faced a much larger $38 million fine.
According to Winklevoss, the SEC’s enforcement actions have been inconsistent and harmful, punishing companies for unclear violations while failing to establish clear guidelines for the industry.
He accused former SEC Chair Gary Gensler of leading an unnecessary crackdown on crypto and then simply walking away without taking responsibility.
He called the agency’s past actions “unacceptable” and argued that regulators should not have the power to launch aggressive investigations without first providing clear rules.
Punishments and policy changes
Winklevoss also proposed specific actions to prevent similar situations from happening in the future. He believes that agencies like the SEC should be held accountable when they launch investigations without first creating proper regulations.
One of his key suggestions is reimbursement for legal costs. He argued that if an agency launches an investigation without first establishing clear rules, it should be required to compensate the affected company for its legal expenses—three times the actual amount.
This, he believes, would deter regulators from pursuing baseless cases and prevent companies from being financially drained by prolonged legal battles.
Another proposal is what he calls dishonourable discharge. Winklevoss insisted that any government official involved in a bad-faith investigation should be fired and publicly named on the SEC’s website.
He argued that if these regulators genuinely believed in their cases, they should have resigned when instructed to drop them, rather than walking away without consequences. This, he said, would create greater transparency and ensure that those responsible for regulatory overreach are held accountable.
Additionally, Winklevoss also suggested a permanent ban from government jobs for officials who misuse their regulatory power. Just as the SEC prevents individuals from trading after serious violations, he believes that those who abuse their authority should be barred from holding positions in federal agencies.
This measure, he argues, would prevent the same individuals from targeting industries unfairly in the future and would help restore trust in regulatory bodies.
He also demanded that the SEC release the names of all individuals involved in past investigations against crypto firms. He believes transparency is necessary to prevent similar enforcement actions from being taken in the future without proper justification.
What this means for crypto regulation in the US
The SEC’s recent change in approach presents both opportunities and challenges for the crypto industry. Under previous leadership, the agency was seen as hostile toward digital assets, launching more than 100 enforcement actions against crypto firms.
However, with new leadership in place, there is a possibility that the SEC could take a more balanced and cooperative approach toward regulation.
This shift has left the crypto industry at a crossroads. Some, like Winklevoss, believe the damage has already been done and are pushing for major changes, including limiting the SEC’s power or even dismantling the agency entirely.
Others see this as a chance to work with regulators to establish clearer and fairer rules for the industry.
Winklevoss has made it clear that while Gemini is relieved to be free from the SEC’s investigation, he is not willing to let the issue go. He believes that without consequences, future industries could face similar regulatory battles.
“The SEC closing its case is a milestone, but it does not make up for the damage done”, Winklevoss said. “We need to ensure regulators are held accountable, and that government agencies do not have unchecked power over innovation”, he added.
His comments reflect a broader frustration within the crypto community. Many companies feel that US regulators have been unpredictable, making it difficult to operate within the country.
As a result, some crypto firms have considered moving to other regions with clearer regulatory frameworks, such as Europe and Asia.
