The complaint of the SEC against Gemini Trust Company, the Manhattan based crypto exchange of the twins Cameron and Tyler Winklevoss, was fired in the first month of 2023. The main matter was the Gemini Earn program that enabled over 340,000 retail investors to lend crypto assets like Bitcoin and Ethereum to Genesis Global Capital for an interest rate of up to 8%. The regulators insisted that these are unregistered securities and in that way, Gemini violated federal laws. This, according to them, happened especially after Genesis collapsed in November 2022 following the FTX scandal, which caused $900 million worth of user funds to be frozen and the risk to be transferred to everyday investors on a very large scale.
Gemini strongly denied the allegations. It argued that the program was not a security and refused to settle the case for the offered amount of $20 million. The exchange stopped Earn payouts, but users had to wait for months to hear about the solutions through Genesis's bankruptcy proceedings. However, the Winklevoss brothers took the opportunity to harshly criticize SEC Chair Gary Gensler publically for what they called "illegal weaponization" of regulations against crypto innovation.
Following the events of Trump's reelection in November 2024 and his January 2025 inauguration, the SEC dramatically changed its course. During the acting leadership and in the presence of forthcoming pro-crypto members such as Hester Peirce, who will chair the new Crypto Task Force, the SEC abandoned its aggressive "regulation by enforcement" era. The publicity surrounding these cases created by industry funded controversies, such as the twins' $2.5 million donation to the PACs supporting Trump, encouraged the SEC to either drop or settle them leniently. Thus, cases against Coinbase, Kraken, Binance, and Ripple, of which the SEC was the plaintiff, are no more.
In mid 2025, Gemini and the SEC mutually agreed to a 60 day break from their negotiations. They then confirmed their complete agreement: no penalty against Gemini, no declaration of guilt, and the closure of the case subject to court consent. The change in politics was the main reason for the end of the "war on crypto", X where the event was announced, wrote by Cameron Winklevoss. This result was a comfort to the industry as it signaled a lighter regulatory approach under Trump's deregulatory push, even though the skeptics caution that it might lead to lesser protection of investors.
