SEC Drops Investigation Into Gemini – But Winklevoss Says Damage Is Already Done

The U.S. Securities and Exchange Commission (SEC) has closed its investigation into the cryptocurrency exchange Gemini without taking any enforcement action. Gemini’s co-founder and president, Cameron Winklevoss, announced the news on Feb. 26, calling it a step forward for the crypto industry. However, he believes the damage has already been done.

Regulator Ends Probe Into Gemini’s “Earn” Program

The SEC had been investigating Gemini over its “Earn” program, which allowed users to lend their crypto assets to Genesis Global Capital in exchange for interest payments. On January 12, 2023, the SEC charged both Gemini and Genesis with offering unregistered securities through the program.

Now, after more than a year of scrutiny, the SEC has decided not to pursue further action against Gemini. In its notice, the agency said:

Based on the information we have as of this date, the regulator will not recommend an enforcement action.

However, the SEC clarified that this decision does not mean Gemini is entirely in the clear. The agency stated that its notice should not be seen as proof that no action will ever be taken against the company in the future.

Winklevoss Slams SEC for Costing Crypto Firms Millions in Legal Fees

While the SEC’s decision relieves Gemini, Winklevoss argues that the regulatory crackdown has already harmed the crypto industry. He accuses the SEC of unfairly targeting crypto companies, leading to huge financial losses and stifling innovation.

The SEC cost us tens of millions of dollars in legal bills alone and hundreds of millions in lost productivity, creativity, and innovation. Of course, Gemini is not alone. 

Winklevoss said.

He added that the SEC’s approach to crypto regulation has caused even greater losses for other companies and has negatively impacted U.S. economic growth.

Regulator Drops Cases Against Other Crypto Firms

The SEC has also recently dropped investigations into several other crypto firms. On Feb. 21, the regulator ended its case against Coinbase, which was accused of operating as an unregistered securities broker. The same day, it also closed its case against NFT marketplace OpenSea.

The SEC also ended its investigation into Uniswap Labs, the developer behind the Uniswap decentralized exchange. Robinhood Crypto, which received a Wells notice in May 2023, was also cleared. 

Winklevoss Demands Accountability for SEC Officials

Winklevoss urged lawmakers to create clear and fair regulations for the crypto industry. He also called for consequences for SEC officials who he believes abused their power by launching “sham investigations” and “baseless enforcement actions.”

Winklevoss suggested that staff involved in these investigations should be fired or barred from working at the SEC. He also argued that affected crypto firms should be reimbursed for their legal costs.

“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,” Winklevoss said.

The Fight Against Unfair Crypto Regulation Isn’t Over

The SEC’s crackdown on crypto was largely driven by its former chair, Gary Gensler. During his leadership from 2021 to 2025, the SEC took more than 100 enforcement actions against crypto firms.

However, Gensler resigned on Jan. 20, the same day Donald Trump began his second term as U.S. president. If elected, Trump had previously promised to fire Gensler, suggesting that the new administration may take a different approach to crypto regulation.

Winklevoss acknowledged that the industry is moving forward but said the fight is not over.

I’m glad to be turning the page here as an industry, but this is not the end. This is just the beginning of ensuring that this never happens again to the crypto industry or any other new and exciting sector in the future.

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