Gemini Co-founder Cameron Winklevoss urged the US Securities and Exchange Commission to compensate the crypto-exchange for its legal costs and dismiss officials who were involved in the now-closed investigation.
Winklevoss revealed on February 26 that the SEC officially dropped its investigation of Gemini without filing any charges.
The exchange confirmed that this decision was made nearly two years after an inquiry began, and almost a full year after receiving the Wells Notice.
The SEC’s recent pattern of withdrawing cases from crypto firms is consistent with the SEC’s recent decision. In the last week, the SEC has abandoned investigations against OpenSea and Robinhood. Uniswap was also halted.
SEC’s approach is criticized
Winklevoss, despite the SEC’s ruling, condemned the agency for its actions, claiming that the long investigation had caused significant damage to the crypto industry and US economy.
He estimated that Gemini alone had incurred tens and hundreds of millions of dollars in legal fees, and suffered hundreds of thousands of dollars in lost innovation and productivity.
According to him
“The SEC cost me tens of thousands of dollars in legal fees alone, and hundreds of millions for lost productivity, creativity and innovation. Gemini isn’t the only one. The SEC’s aggregate behavior towards other crypto projects and companies cost orders of magnitudes more and caused an unquantifiable economic loss to America.”
Winklevoss emphasized that the aggressive enforcement approach of the SEC discourages engineers and entrepreneurs from entering into crypto. He also pointed out that some projects may have been abandoned, or never started, because of the hostile environment.
Winklevoss proposed that to prevent this regulatory overreach companies should be reimbursed three times their legal costs in the event that investigations do not result in charges. He also recommended that SEC employees responsible for unjustified actions taken by the agency be permanently barred.
He added:
“Just as the SEC bars individuals who break the law from trading securities, there should be an administrative process that bars those, like Gary Gensler, who weaponize the laws, and those who participate in weaponization, from being appointed or hired by any agency again. Lifetime ban in the case.”
Winklevoss concluded, that regulatory agencies will continue to impede innovation and economic growth if they do not take real responsibility.
He said:
“We won’t rebuild trust and integrity within federal agencies until there are serious consequences for bad-faith actors. Operation Chokepoint did not stop at version 1.0. Operation Chokepoint continued into 2.0 because bureaucrats were not held accountable for their actions in 1.0. There will be no 3.0 until there is a public, real reckoning with 2.0.”
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