The SEC dropped its long-running investigation into Gemini today, bringing no charges. This week alone, the Commission has dropped three other investigations and is also closing active lawsuits.
However, co-founder Cameron Winklevoss does not seem satisfied with this reconciliatory gesture. He suggested stiff penalties for the Commission to discourage another Gensler-style crypto crackdown in the future.
No Charges for Gemini
The SEC, one of the US largest financial regulators, has been on a spree recently. In the last week, it dropped investigations against Opensea, Robinhood, and Uniswap, but it isn’t done there.
Cameron Winklevoss, co-founder of Gemini, announced today that the SEC also shuttered an investigation against his firm.
“On Monday, the SEC informed our litigation counsel that it has closed its investigation into Gemini and will not be pursuing an enforcement action against us. While this marks another milestone to the end of the war on crypto… it does little to make up for the damage this agency has done to us, our industry, and America,” Winklevoss claimed via social media.
Winklevoss claimed that the SEC sent Gemini a Wells Notice under a year ago, but its investigation never involved formal charges.
Recently, the Commission has been dropping legal battles at a fast rate, settling with Coinbase and preparing an agreement with Tron in a civil fraud case. The SEC is also stalling its long-running suit against Ripple, but it’s technically active.
None of these reconciliatory measures seem to have moved Winklevoss much. Last month, Gemini had to pay a $5 million fine to the CFTC, and the SEC gave its business partner Genesis a $38 million fine.
Both firms were sued in 2023. In today’s statement, Winklevoss took an extremely hostile stance towards the regulators responsible:
“How many years of innovation were kicked down the road at the expense of Americans? We will never know. Unless there is a cost and price to be paid for this behavior, it will happen again. Everyone involved in these actions should be fired immediately and in a public way. Their names, roles, and the actions they participated in should be posted,” he said.
Some of his other suggestions include making the SEC pay Gemini 3x the cost of its legal bills, banning its employees from employment at federal agencies for life, and other “serious consequences for bad faith actors.”
For Winklevoss, the SEC’s investigation into Gemini is an outright policy failure that must be ferociously corrected.
This plays into a fundamental dilemma that the crypto industry is facing in light of its newfound political influence. The SEC was a powerful opponent under Gensler, but it’s on our side now.
Under new leadership, it has shown downright enthusiasm for making new regulations. In other words, it could be a powerful tool moving forward.
Therefore, the dilemma is this: should crypto try to use the Commission or destroy it? For Gemini and Coinbase, the SEC under Gensler engendered enough hostility that destruction seems preferable.
However, putting pro-industry Commissioners at its helm was a major accomplishment. It may be shortsighted to throw away years of work.
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