The American crypto exchange Gemini is currently suffering a lot the bankruptcy of Genesis, but that hasn’t stopped the Securities and Exchange Commission (SEC) from suing Gemini. The policymaker believes that Gemini’s Earn service was off the hook. Yet Gemini is now trying to prevent the lawsuit from continuing.
Gemini doesn’t want a lawsuit with SEC
In a document that the crypto exchange has filed with the court can be read that it asks the judge to dismiss the lawsuit. The SEC sued Genesis and Gemini in January, just after it became clear that Genesis is in financial trouble and unable to repay Gemini.
Gemini is said to sell securities with its Earn service, but it has not registered it with the SEC. Genesis was included in the indictment because it managed Gemini’s assets and paid a return in return. So it would have bought the unregistered securities.
The exchange finds that by definition, the Earn service already does not represent sales of unregistered securities, and that the lawsuit can therefore be dismissed. According to Gemini, Genesis filed a similar motion in which Genesis would find much the same thing. Gemini supports the arguments of Genesis.
In a blog post and on Twitter, Gemini and his lawyer Jack Baughman call the lawsuit ill-advised. There would never have been a sale, the assets still belonged to Gemini’s customers and were only managed by Genesis.
1/ I and the @JFBLegal team are proud to represent @Gemini. Today we filed our motion to dismiss the @SEC‘s ill-conceived lawsuit against Gemini and Genesis relating to the Earn program.
— Jack Baughman (@JackBaughman27) May 26, 2023
SEC on rampage in the courtroom
Gemini and Genesis are not the only parties against whom the SEC has launched a legal dispute. For example, there is the lawsuit against Ripple because the SEC believes that XRP has been sold as an unregistered security. It also fined Kraken for trading unregistered securities with crypto staking. Kraken has therefore stopped offering strikes.
Meanwhile, Coinbase is done with the SEC’s policy. The exchange has decided to file a lawsuit against the SEC, alleging it has unclear policies.