Gemini moves to dismiss SEC lawsuit, claims accusations flawed

The exchange’s lawyers argued that the SEC hasn’t provided key details about alleged securities, such as sale date or parties involved, making its case weak against Gemini.

article-image

24K-Production/Shutterstock, modified by Blockworks

share

Gemini is pushing a federal judge to dismiss the US Securities and Exchange Commission’s lawsuit, arguing the agency didn’t conclusively show the exchange sold unregistered securities.

In January, the SEC claimed Gemini and Genesis improperly managed customer funds, pointing to issues with Gemini Earn and a mandatory Master Digital Asset Loan Agreement (MDALA) for participation in the program.

The SEC asserted in its lawsuit that Gemini Earn and MDALA qualify as securities.

But Gemini’s legal team argued in a court filing on Friday that the SEC cannot substantiate its claims in court.

“In any event, even assuming for the sake of argument that SEC has somehow described a security (under either of its inconsistent theories), it has not plausibly alleged that such security was ever sold or offered for sale,” Gemini lawyers John Baughman and John Nathanson wrote.

The attorneys further claimed that the SEC can’t specify details like the sale date of the alleged security, the parties involved or the price set.

“The complaint is silent on each of these points, and that silence is fatal to the SEC’s theory,” they added.

“Is the SEC seriously contending that the entire Gemini Earn program was a thing that could be bought and sold? Is it really arguing that someone held title to the program and that it was up for sale?” they added. 

“The assertion, besides being untethered from the facts alleged in the complaint, bears no relation to reality.”

Gemini has sought an oral hearing in its bid to have the case dismissed.

Last month, Gemini sued Digital Currency Group and CEO Barry Silbert, claiming they engaged in a fraudulent scheme to lend significant amounts of crypto and US dollars to DCG’s subsidiary, Genesis. DCG has filed a motion to dismiss.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Screenshot 2024-05-23 091855.png

Research

Bitcoin L2s aim to boost scalability while preserving decentralization and security, unlocking a better user experience, and new avenues for Bitcoin-powered innovations. However, no existing Bitcoin L2 leverages the full security of Bitcoin.

article-image

Three Democrats joined Republicans Thursday in supporting a bill that would block the Federal Reserve from issuing a retail CBDC

article-image

Plus, Zeta Markets has released a litepaper for the “Zeta X” layer-2 it’s hoping to send to mainnet in early 2025

article-image

From CME Group’s launch of ether futures to congressmen urging the SEC to approve spot funds, a lot has led up the agency’s decision

article-image

Sponsored

As part of the #Breakout2024 plans, Radix has introduced Token Trek

article-image

House members ask Gensler to keep a “consistent and equitable approach” with ether ETF proposals after the agency approved spot bitcoin ETFs in January

article-image

Using old-world instruments to address crypto user experience challenges goes against what this industry set out to do