Gemini co-founder Cameron Winklevoss has urged the US Securities and Exchange Commission (SEC) to compensate the crypto exchange for its legal expenses and dismiss officials involved in its now-closed investigation.
On Feb. 26, Winklevoss disclosed that the SEC had officially dropped its investigation into Gemini without filing charges.
The exchange later confirmed this, noting that the decision came nearly two years after the inquiry began and almost a year after receiving a Wells Notice.
The SEC’s decision aligns with its recent pattern of withdrawing cases against crypto firms. In the past week alone, the agency has abandoned investigations into OpenSea, Robinhood, and Uniswap and paused its lawsuit against Binance.
Slams SEC’s approach
Despite the SEC’s decision, Winklevoss condemned the agency’s actions, arguing that the prolonged investigation had significantly damaged the crypto industry and the US economy.
He estimated that Gemini alone incurred tens of millions in legal fees and suffered hundreds of millions in lost innovation and productivity.
According to him:
“The SEC cost us tens of millions of dollars in legal bills alone and hundreds of millions in lost productivity, creativity, and innovation. Of course Gemini is not alone. The SEC’s behavior in aggregate towards other crypto companies and projects cost orders of magnitude more and caused unquantifiable loss in economic growth for America.”
Winklevoss pointed out that the SEC’s aggressive enforcement approach discouraged engineers and entrepreneurs from entering crypto. He also highlighted how some projects might have been abandoned or never even started because of the hostile enforcement environment.
To prevent such regulatory overreach, Winklevoss suggested that companies should be reimbursed triple their legal costs if investigations fail to result in charges. He also recommended that SEC officials responsible for unjustified enforcement actions be permanently barred from future agency roles.
He added:
“Just like the SEC bars individuals from trading securities if they break the law, there should be a process that bars those like Gary Gensler who weaponize the law, as well those who participate in the weaponization, from ever being appointed to or hired by an agency again. Lifetime ban in this case.”
Winklevoss concluded that without real accountability, regulatory agencies would continue to hinder innovation and economic growth in the United States.
He said:
“We will not rebuild trust and integrity in federal agencies unless there are serious consequences for bad faith actors. Operation Chokepoint didn’t stop at 1.0. It continued to 2.0 because not enough was done to hold bureaucrats accountable for their actions during 1.0. And there will be a 3.0 unless there is a real, public reckoning for 2.0.”
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