The U.S. SEC has officially closed its probe into Gemini, a New York-based crypto exchange, and will not pursue enforcement action.
The decision follows nearly two years of regulatory scrutiny and comes after the agency had previously issued a Wells Notice to the company.
SEC Ends Investigation Into Gemini
On Monday, the SEC informed Gemini’s legal counsel that the probe was ending without charges. The investigation had lasted 699 days, with the agency sending a Wells Notice 277 days before deciding to drop the case.
The development follows a series of similar decisions by the SEC, including the closure of investigations into Robinhood Crypto, Uniswap Labs, and OpenSea.
Cameron Winklevoss, co-founder of Winklevoss Capital Management and Gemini Exchange, criticized the SEC’s handling of the case. He noted the significant financial and operational toll caused by the prolonged investigation.
On Monday, the SEC informed our litigation counsel @JackBaughman27 that it has closed its investigation into @Gemini and will not be pursuing an enforcement action against us. This comes 699 days after the start of their investigation and 277 days after they sent us a Wells… pic.twitter.com/dTjg9CJXVl
— Cameron Winklevoss (@cameron) February 26, 2025
The company reported substantial legal expenses and a broader impact on industry innovation and productivity. According to Gemini, the lack of clear regulatory guidelines before enforcement actions contributed to uncertainty within the cryptocurrency sector.
SEC’s Approach Faces Criticism
Notably, Winklevoss questioned the consequences of such investigations on industry growth. The company highlighted the challenges faced by engineers and developers who either abandoned the sector or hesitated to enter due to regulatory uncertainties. The co-founder further suggested that the SEC’s enforcement approach discouraged startup creation and stifled financial innovation in the United States.
As a measure to prevent similar occurrences, he proposed financial reimbursements for companies targeted without clear regulatory guidance. Under this approach, the SEC would be required to compensate firms for legal expenses incurred due to investigations that do not result in enforcement action.
Additionally, Winklevoss suggested that agency officials involved in “unjust” actions should face immediate dismissal, with their roles and decisions made publicly available.
Broader SEC Actions and Policy Shifts
The decision to drop the Gemini case aligns with recent shifts in SEC enforcement under the new administration. Following the resignation of former SEC Chair Gary Gensler, regulatory decisions have taken a more lenient direction.
Notably, the commission recently dropped cases against multiple crypto firms, including Robinhood Crypto and Uniswap Labs. Meanwhile, the SEC issued a stay in its ongoing investigation into Binance. Industry commentators believe Ripple’s case could be the next for a close.
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