SEC Softens Crypto Stance as Sun Eyes Settlement, Gemini Cleared of Probe

The SEC is rolling back its aggressive crypto enforcement campaign that defined the Gensler era.

After a 699-day investigation into Gemini Trust, the regulator informed the exchange on Wednesday it would not pursue enforcement action, concluding a probe that co-founder Cameron Winklevoss claimed cost "tens of millions … in legal bills."

Winklevoss framed it as part of a broader shift, citing the SEC’s withdrawal of cases against Coinbase, OpenSea, Robinhood, and UniSwap, but criticized the agency for causing significant financial and economic harm to the crypto industry. 

Winklevoss argued that the SEC’s actions stifled innovation and drove talent away from the sector. 

He called for reforms, including financial reimbursement for companies forced to fight baseless enforcement actions, public firing of SEC officials involved in what he described as regulatory overreach, and lifetime bans for those who "weaponize" the law. 

He warned that without accountability, similar crackdowns will continue and urged the industry to push for structural reforms to prevent future regulatory overreach.

Justin Sun

At the same time, the SEC filed a joint motion in its case against Justin Sun and Tron Foundation, requesting a pause to explore a "potential resolution."

"A stay is in the Court's and the public's interest because a resolution would conserve judicial resources," according to a Wednesday filing in the Sun case.

Representatives for Sun did not immediately respond to a request for comment.

Thursday’s motion mirrors similar filings in cases either dropped or paused by the SEC over the past week, with Binance, Coinbase, and Robinhood each citing efforts toward case resolution.

The SEC sued Sun in March 2023, alleging his companies conducted over 600,000 wash trades to artificially inflate the TRX token's volume, along with fraud and unregistered securities violations.

At the time, the SEC alleged that Tron’s founder created false and misleading appearances of trading volume to make TRX easier to sell, thereby generating some $32 million in proceeds from allegedly unregistered offers and sales of the cryptocurrency.

Sun, who recently purchased $30 million in tokens from Trump-affiliated World Liberty Financial, has become an adviser to the company.

These developments align with President Trump's stated ambition to position the United States as a global crypto hub, nominating and appointing "crypto-friendly" public servants to his administration.

Industry participants view these shifts as the beginning of a significant regulatory realignment after years of what many characterized as "regulation by enforcement" under the previous SEC leadership.

Edited by Sebastian Sinclair