Like oinbase">Coinbase and Binance, Gemini filed to dismiss the SEC lawsuit claiming their Earn program is an unregistered security. Gemini argues the SEC failed to clearly demonstrate how Earn violates securities laws. Similar to oinbase">Coinbase, Gemini says the SEC has not adequately defined what constitutes a security, and vague categorization of everything as a security is unjustified.
In its motion, Gemini contends the SEC should simply ask straightforward questions to determine if something is a security, like identifying the specific unregistered security sale, parties, timing, and price. Gemini asserts the SEC never pinpointed an actual unregistered security sale in its case. Gemini seeks dismissal because the SEC lacks clarity on which digital asset services are securities according to the exchange’s lawyers.
Gemini Claims SEC Case is Deficient, Regulator “Floundering”
Gemini argues the SEC’s two theories for classifying either the Loan Agreement itself or the whole Gemini Earn program as a security are misleading and “absurd.”
In response to the filing, Gemini’s lawyer Jack Baughman criticized the SEC for being unable to provide any valid arguments against the exchange, predicting another loss for the regulator. He highlighted that the SEC can’t even determine what the security in question is.
Baughman doubts the SEC’s broad interpretation of “sale,” noting it relies on vague points about Gemini and Genesis “selling” their commitment to pay interest in exchange for crypto assets. Baughman rejected this notion, underscoring the distinction between a sale and a loan.
As Baughman has stated in previous filings, Gemini already clarified the transactions in the Earn program are more like loans and shouldn’t violate securities laws. With no clear rules, the SEC seems confused and inconsistent, weakening their stance.
Meanwhile, Genesis, the other company in the SEC’s case, faces issues too. Genesis’ parent DCG wants to dismiss Gemini’s lawsuit alleging DCG misled them about Genesis’ finances.
#Gemini #cryptocurrency #digitalassets
