The US Securities and Exchange Commission (SEC) is making clear moves to ease its enforcement actions against the cryptocurrency industry. After a series of lawsuits and investigations targeting major companies, the SEC is now backing down, with Gemini becoming the latest name to escape the agency’s scrutiny.
SEC Ends Gemini Investigation
On Wednesday, Cameron Winklevoss, co-founder of cryptocurrency exchange Gemini, announced that the SEC has officially ended its investigation into the company without filing any charges. According to him, the 699-day investigation has caused significant damage to the company both financially and reputationally.
Previously, the SEC also dropped its investigation into Robinhood Crypto on February 21 and withdrew its lawsuit against Coinbase. On February 26, the SEC announced that it no longer intends to pursue enforcement action against Uniswap, signaling a shift in the agency's approach to the crypto space from its previous leadership.
Massive Legal Costs and Impact on the Crypto Industry
Winklevoss noted that the SEC's investigation alone has cost Gemini tens of millions of dollars in legal fees. He blamed the SEC for causing unquantifiable harm to companies in the industry and stifling innovation.
"It is unacceptable for an agency like the SEC to bully, harass, and attack a legitimate industry and then simply back down without taking any responsibility," Winklevoss said. He called for clear legal measures to protect the crypto industry and ensure accountability for regulators.
SEC Postpones Case Against Justin Sun
In addition to withdrawing enforcement actions against major companies, the SEC also announced that it is seeking to “pause” its case against Tron founder Justin Sun.
According to a filing on February 26, the SEC and Justin Sun are in talks to reach a potential settlement that could result in the dismissal of the case against Sun and related companies, including the Tron Foundation, BitTorrent Foundation, and Rainberry.
The civil fraud lawsuit, filed by the SEC in March 2023, alleges that Sun manipulated the trading volume of Tronix (TRX) to mislead investors. According to court documents, Sun directed employees to make hundreds of thousands of trades to create fake volume, which helped him illegally earn $31 million.
In addition, Sun is also a major investor in former President Donald Trump’s cryptocurrency platform, World Liberty Financial. He invested a total of $75 million in the platform through two separate purchases.
SEC’s New Crypto Policy Signals
The SEC’s shift in stance towards the cryptocurrency industry is generating mixed reactions. On one hand, the crypto community has welcomed the change, seeing it as a positive sign for the industry’s growth. On the other hand, many are concerned that the withdrawal without accountability could lead to similar actions in the future.
Winklevoss stressed that the damage done by previous investigations has already been done and cannot be reversed. He called for a more transparent regulatory framework to ensure that the cryptocurrency industry can thrive without being hampered by inconsistent policies from regulators.
