A couple of years ago, the SEC accused Gemini of offering the public unregistered securities.
Those accusations were part of a specific strategy by the American agency aimed at limiting or imposing restrictions on the crypto markets. Similar accusations, for example, were also made against another American crypto exchange, Coinbase.
Since then, 699 days have passed since the start of the investigations against Gemini, and 277 days since the crypto exchange received a Wells Notice from the same agency.
SEC vs Gemini: the closure of the case
Yesterday, one of the two founders of the exchange, Cameron Winklevoss, wrote that on Monday the SEC informed their legal advisor that they had closed these investigations.
In light of this, the accusations have been dropped, the case has been closed, and no further enforcement actions will be taken against Gemini for this matter.
Winklevoss writes:
“Although this represents another milestone towards the end of the war on cryptocurrencies, which has already included the withdrawal by the SEC of the lawsuit against Coinbase and the closure of investigations on OpenSea, Robinhood, and UniSwap, it does not at all compensate for the damage that this agency has caused to us, our sector, and America”.
Most likely the decision of the SEC, as in other similar cases, depends on the change of strategy of the agency towards the crypto markets.
The Trump Effect
The previous strategy of the SEC towards the crypto markets had been developed and imposed by the former chairman Gary Gensler, a Democrat appointed by the former US Democratic President Joe Biden.
Gensler had taken a hard stance on the crypto markets, especially after the collapse of FTX. It is important to remember that the co-founder and CEO of FTX, Sam Bankman-Fried, had donated many millions of dollars to Democratic politicians, taken from the accounts of his exchange’s clients.
After the electoral victory of the Republican Donald Trump, at the beginning of November, Gensler had announced his resignation, which became effective from the day Trump took office at the White House (January 20). From that moment, the anti-crypto strategy of the SEC was effectively abandoned.
The new pro-tempore president of the SEC, Mark Uyeda, is pro-crypto, and the next president should be as well, given that Paul Atkins has been designated for that role.
The impact on crypto markets
The impact on the crypto markets of President Gensler’s anti-crypto strategy has been felt, especially between 2022 and 2023.
To tell the truth, during the second half of 2023, a couple of court rulings had already begun to sink this strategy, as they marked the defeat of the SEC in two key cases, such as that of XRP and the spot Bitcoin ETFs.
During 2024, when Gensler was still in the presidency, this strategy was effectively cornered, as the SEC ended up approving on its own initiative even the spot ETH ETFs.
Winklevoss, however, points out that the SEC lawsuit has cost Gemini tens of millions of dollars just in legal expenses and hundreds of millions in lost productivity, creativity, and innovation, and Gemini was not the only one to have these problems.
Writes:
“The behavior of the SEC overall towards other companies and cryptocurrency projects has cost orders of magnitude more and has caused unquantifiable losses in economic growth for America”.
So if in the end the impact of Gensler’s SEC anti-crypto strategy had limited effects on cryptocurrency prices, it instead had strongly negative impacts on the US sector operators.
In fact, Winklevoss adds:
“It is completely unacceptable for an agency like the SEC to act like a bull, harass and attack a legal industry and then decide one day to simply say that everything is fine and walk away”.
The crypto regulations in the USA
One of the major problems is still the lack of clear regulation for the crypto sector in the USA.
The EU, for example, has already established clear regulations, even if perhaps a bit too stringent, but in the USA, attempts to create one have been blocked in Congress for years.
However, with the Trump administration, it is possible that they will finally manage to produce one, at least to make it clear to the operators in the sector what they must, can, or cannot do.
One of the proposals in this regard is to remove the supervision of the crypto markets from the SEC, transferring it to another agency, the CFTC, which deals with commodities and not securities. In fact, it is now clear that many of the main cryptos cannot be considered securities, although here and there, there are some.
Winklevoss himself concludes by saying:
“I am happy to turn the page here as a sector, but this is not the end, rather the beginning to ensure that this never happens again to the cryptocurrency sector or any other new and exciting frontier sector in the future. Here we are to continue reforming our governance and fight the good fight. Something incredible awaits us”.
Source: https://en.cryptonomist.ch/2025/02/27/the-sec-closes-the-case-against-gemini-the-series-of-positive-outcomes-continues/