The U.S. Securities and Exchange Commission (SEC) has officially closed its investigation into the cryptocurrency exchange Gemini, signifying a reduction in regulatory scrutiny within the industry.

This decision adds Gemini to a list of crypto firms recently spared from enforcement actions by the SEC.

Cameron Winklevoss, co-founder and president of Gemini, shared a notice from the SEC on February 26, which indicated that the agency had concluded its investigation and would not recommend any enforcement action.

Context of the SEC’s Investigation
The investigation was linked to an SEC lawsuit against Gemini and Genesis Global Capital on January 12, 2023, over claims of offering unregistered securities through Gemini’s “Earn” program, which allowed users to earn interest on their crypto deposits.

Despite this new development, Winklevoss mentioned that the previous inquiry inflicted severe financial and innovative setbacks on the company, estimating legal costs alone at tens of millions of dollars. He pointed out that many promising ventures may have been dissuaded from entering the crypto sector because of aggressive regulatory actions.

Recent Developments in Regulatory Enforcement
The SEC’s recent closure of the Gemini investigation mirrors similar actions taken against other crypto entities, including the conclusion of cases against Coinbase and the NFT platform OpenSea earlier this month.

The end of these investigations has led Winklevoss to express optimism, suggesting that the “war on crypto” might be wavering. However, he urged the need for responsible legislative measures to avoid future overreach and ensure accountability among regulators.

“On Monday, the SEC informed our legal counsel that it has closed its investigation into Gemini and will not pursue an enforcement action against us. This follows 699 days since the start of their investigation.” — Cameron Winklevoss

A Shift in SEC Leadership
This regulatory shift coincides with the resignation of former SEC Chair Gary Gensler, who oversaw a rigorous crackdown on the cryptocurrency industry. His departure, aligned with a new presidential term signaling a more favorable stance towards crypto, might have influenced the SEC’s changing regulatory atmosphere.