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The SEC under Gary Gensler issued Wells notices against Gemini and several other crypto firms. YouTube Screenshot/ Gemini Official YouTube Chanel

KEY POINTS

  • Cameron Winklevoss proposed that the SEC reimburse crypto firms if a regulator 'refuses to write rules' before taking legal or investigative actions
  • He also said involved SEC staffers should be given a 'dishonorable discharge' and be banned from working at other federal agencies
  • He claimed that Gemini lost 'tens of billions' in its fight against the SEC and lost hundreds of millions more in lost productivity
  • The SEC filed a joint motion with the Tron Foundation and Justin Sun to pause a lawsuit to 'conserve judicial resources'

The U.S. Securities and Exchange Commission (SEC) has closed its investigation into cryptocurrency exchange and custodian Gemini, adding to its growing list of crypto firms that the Wall Street regulator has decided to approach with a more constructive approach.

It also filed a joint motion with the Tron Foundation and TRON network Founder Justin Sun, seeking a pause in its lawsuit against the blockchain in a bid to explore a "potential resolution."

Gemini Co-Founder Proposes Reimbursements for Crypto Firms' Legal Costs

Cameron Winklevoss, who co-founded Gemini with his twin, Tyler, took to X Wednesday to reveal that the SEC informed the exchange's legal counsel of its decision to drop the investigation, 277 days after the SEC under former Chair Gary Gensler sent a Wells notice to the exchange.

Winklevoss acknowledged that the move was "a milestone to end the war on crypto," but it "does little to make up for the damage this agency has done to us, our industry, and America."

He went on to claim that Gemini lost "tens of millions of dollars in legal bills" and hundreds of millions were wiped out "in lost productivity, creativity, and innovation."

The crypto executive recommended the following reforms in terms of investigations into crypto firms:

  • Legal expense reimbursement – He proposed reimbursements for crypto and blockchain firms slapped with investigation or enforcement actions "if an agency refuses to write rules before it" initiates such actions. For Winklevoss, such a move will make affected companies "financially whole for the time and money you spent defending" their case.
  • Dishonorable discharge for involved staffers – Winklevoss said SEC staffers involved in such actions "should be fired immediately and in a public way," with their names, roles and actions posted on the regulator's website for transparency.
  • Federal agency ban – The tech executive said "those like Gary Gensler who weaponized the law" and everyone else involved in the "weaponization" should be banned from being appointed or hired by a federal agency since the "SEC bars individuals from trading securities if they break the law" anyway.
  • Serious consequences for "bad faith actors" – Winklevoss said such actors against the industry should be held accountable, specifically mentioning the controversial Operation Choke Point 2.0 that allegedly "debanked" tech and crypto executives and discouraged banks to engage with crypto businesses.

SEC Files Joint Motion with TRON to Pause Case

Also on Wednesday, the SEC filed a joint motion with the Tron Foundation and Sun to "move to stay this case to allow the Parties to explore a potential resolution."

The financial regulator pointed out that pausing the lawsuit will "conserve judicial resources," seemingly giving a nod to crypto leaders who accused the Gensler SEC of wasting millions in taxpayer dollars to pursue crypto firms instead of focusing on real issues.

Neither the Tron Foundation nor Sun have issued an official statement on the matter as of late Wednesday.

Still, the development marks another step in the new SEC's bid to shift its predecessor's approach toward regulating digital assets, blockchain, and cryptocurrencies.

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