SEC Drops Gemini Probe After Two-Year Standoff

The U.S. Securities and Exchange Commission (SEC) has ended its investigation into Gemini, a cryptocurrency exchange co-founded by Cameron Winklevoss. The agency informed Gemini's legal counsel that it would not pursue enforcement action against the company, nearly two years after the probe began.

Winklevoss took to Twitter to announce the news, expressing relief that the investigation was finally over. The SEC's decision comes after 699 days of investigation and 277 days following the issuance of a Wells Notice, which is a formal warning that enforcement action may be taken.

Gemini was initially charged alongside Genesis Global Capital in January 2023 over its now-defunct Earn program. The SEC claimed that the program involved the sale of unregistered securities, allowing users to lend crypto assets in exchange for yield. The program collapsed after Genesis halted withdrawals during the 2022 bear market.

Although the case is now closed, the SEC made it clear that this is not an official exoneration and left the door open for future action. Winklevoss hailed the development as a milestone in ending the "war on crypto" but criticized the SEC for the "tens of millions of dollars in legal bills" and broader setbacks inflicted on the industry.

Winklevoss also proposed several measures to prevent similar crackdowns in the future. He called for reimbursement measures, arguing that companies caught in regulatory battles should be compensated three times their legal costs if an agency fails to establish clear rules before launching an investigation. Additionally, he suggested a "dishonorable discharge" policy, where SEC officials involved in what he sees as baseless enforcement actions would be publicly fired, with their names and roles listed on the agency's website. Winklevoss also proposed an agency ban, where regulators who have "weaponized the law" would be permanently barred from holding government positions.

Under former SEC chair Gary Gensler, the agency took an aggressive stance against the crypto industry, bringing more than 100 enforcement actions against companies since 2021. His tenure saw lawsuits against major firms, including Coinbase, Binance, Ripple, and Kraken, over allegations of operating as unregistered securities platforms. Gensler's approach, often criticized as "regulation by enforcement," led to legal battles that shaped the industry's relationship with regulators.

Since Gensler