SEC Closes Gemini Probe: No Action, But Uncertainty Lingers

The U.S. Securities and Exchange Commission (SEC) has concluded its investigation into the Gemini crypto exchange, operated by the Winklevoss twins, without recommending any enforcement action. Gemini co-founder Cameron Winklevoss shared a notice from the SEC's legal team, stating that the investigation has been closed after 699 days, and 277 days following the issuance of a Wells Notice.

The SEC's decision comes as a relief for Gemini, but it is important to note that the agency's notice does not exonerate the company. The investigation centered around Gemini's "Earn" program, which the SEC alleged involved the offering of unregistered securities through a partnership with crypto lending firm Genesis Global Capital. The SEC clarified that its conclusion is not final, and further action could be taken in the future.

In a statement, Cameron Winklevoss reflected on the lengthy battle with the SEC, highlighting the immense legal costs incurred, amounting to tens of millions of dollars, and the broader economic losses resulting from the uncertainty caused by the SEC's regulatory approach. He lamented that while the SEC's actions may have been framed as a protective measure, the agency's conduct had significant negative consequences on American innovation, causing crypto talent to seek opportunities in other sectors.

However, Winklevoss wrote, "So where do we go from here? 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. Unless there is a cost and price to be paid for this behavior, it will happen again."

This development follows the SEC's recent withdrawal of lawsuits against other major players in the crypto industry, including Coinbase, and the closure of investigations into OpenSea, Robinhood, and Uniswap. This move raises the possibility that the SEC may take similar actions with other high-profile cases, including the ongoing legal battle involving Ripple Labs.