- The SEC ended its Gemini probe with no action but warned it could reopen the case in the future.
- Crypto firms lost millions in legal fees as SEC investigations slowed growth and innovation.
- Industry leaders urge fair regulations and demand accountability for failed enforcement actions.
The United States Securities and Exchange Commission has officially closed its investigation into Gemini cryptocurrency exchange operations. The agency stated that they will refrain from filing any enforcement actions at this time. Gemini co-founder and president Cameron Winklevoss declared the news publicly on February 26.
The SEC had accused Gemini and crypto lender Genesis Global Capital of offering unregistered securities. The charges stemmed from their joint “Earn” program. The agency initiated legal action against Gemini on January 12th 2023. The SEC made it clear that their decision to close the case does not prevent future enforcement actions.
Legal Costs and Industry Impact
The investigation led to substantial financial strain for Gemini. The company faced millions in legal expenses and suffered business setbacks. Winklevoss criticized the SEC for its approach to crypto firms. He stated that regulatory actions have harmed innovation and economic growth in the sector.
Several other crypto firms also experienced similar challenges with the SEC. The SEC ended its case against Coinbase, which was accused of operating as an unregistered securities broker. The agency also dropped its investigation into OpenSea which is a leading NFT marketplace. Uniswap Labs and Robinhood Crypto also had their cases closed.
Call for Regulatory Reform
The SEC’s pattern of aggressive oversight has sparked calls for legislative changes. Some industry leaders argue for greater accountability from regulators. They suggest that staff responsible for failed enforcement actions should face consequences. Others believe affected firms should receive compensation for their legal costs.
The crypto industry is directing its efforts towards achieving clear regulatory frameworks. Advocates insist that regulatory standards must be established before implementing strict enforcement practices. The future development of the crypto market depends on regulatory bodies implementing a balanced enforcement policy. The SEC’s closure into Gemini review, represents another pivotal development in the ongoing crypto regulatory discussions.
