After an extensive investigation lasting nearly two years, the US Securities and Exchange Commission (SEC) has decided to close its inquiry into Gemini, the cryptocurrency exchange co-owned by the Winklevoss twins, without pursuing any enforcement action.
Cameron Winklevoss shared the news on X, posting a photo of a letter from the SEC dated 24 February 2025, which confirmed that the Commission staff would not recommend any charges against the platform.
Despite the positive outcome, Winklevoss expressed frustration over the costs and disruptions caused by the investigation, which he claims ran into tens of millions of dollars in legal fees alone.
The SEC had first launched its probe into Gemini 699 days ago, and 277 days ago issued a Wells Notice, a formal warning that it might take legal action.
Winklevoss described this as an instance of regulatory overreach, accusing the SEC of attempting to “bully, harass, and attack a lawful industry.”
Gemini’s case is part of a larger trend of the SEC reconsidering its approach to the cryptocurrency sector.
In recent days, the SEC also chose to drop charges against Coinbase Global and cease its investigation into decentralised exchange Uniswap.
These developments indicate a shift in the Commission’s regulatory posture under the Biden administration, which has been more cautious with crypto enforcement actions.
The SEC’s decision to halt investigations and dismiss potential charges against major players in the crypto industry suggests the agency may be reevaluating its earlier aggressive stance, which had previously targeted multiple firms in the sector.
Despite the closure of the investigation, Winklevoss is far from satisfied.
He called for severe consequences for the SEC officials responsible for the prolonged inquiry into Gemini.
He specifically demanded that the individuals behind the investigation be fired, with their names and roles made public.
In a scathing statement, he proposed that the SEC should be required to compensate Gemini for the legal costs incurred, suggesting that the agency should pay the company three times the amount spent defending itself.
Cameron Winklevoss is a cryptocurrency investor and co-founder of Gemini, known for his involvement with Facebook and Olympic rowing.
Additionally, Winklevoss called for lifetime bans on federal employment for those involved in the investigation.
Winklevoss said,
“The damage caused is beyond words. It’s wholly unacceptable for an agency such as the SEC to bully, harass, and attack a lawful industry and then decide one day to simply say we are good and walk away.”
Although the SEC has stepped back from aggressive enforcement, the industry remains wary of its past actions.
In addition to legal costs, Gemini’s business partner, Genesis, was hit with a hefty $38 million fine by the Commodity Futures Trading Commission (CFTC), while Gemini itself had to pay a $5 million fine.
Winklevoss has pointed out that the SEC’s actions delayed innovation in the US crypto space, with the regulatory uncertainty causing long-lasting harm to the industry.
This scrutiny has raised broader questions about the role of the SEC and the regulatory framework surrounding the crypto sector.
While the current leadership at the SEC appears more open to constructive dialogue, should the industry work with the agency to create clearer rules, or continue challenging its practices?
With the SEC’s approach shifting recently, the crypto industry is left to deal with the ongoing uncertainty in the regulatory environment.
Some see this as a chance to work together, but others, like Winklevoss, argue that the SEC’s past actions should have serious consequences.
As the agency rethinks its strategy, the future of crypto regulation in the US is still up in the air.
The decisions the industry makes next could play a big role in how it interacts with the SEC moving forward.
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