Gemini demands simplicity in its SEC lawsuit filing

By: Dickson Arinze

Gemini demands simplicity in its SEC lawsuit filing

August 21, 2023 6:40 AM

Gemini has just filed lawsuits maintaining its motion to dismiss the SEC action on the grounds that the SEC's claims and arguments have changed.


Gemini, a cryptocurrency exchange, has submitted a reply brief in its complaint against the United States Securities and Exchange Commission (SEC), arguing that the case should be dismissed.


Gemini Earn, which allows users to lend cryptocurrency assets like Bitcoin (BTC) to Genesis, is being sued for allegedly selling unregistered securities in violation of federal law. 


On August 18th, Gemini stated→ in court documents that the SEC has not made a clear claim. This was submitted to the United States Court for the Southern District of the State of New York.


"Section 5 of the securities act is not hard to understand," the filing said, suggesting that the SEC has not made the necessary elements for claiming a violation of the statute obvious.


"The fact that the SEC is at a loss as to which security is at issue demonstrates how vulnerable it is."


It also claimed that the SEC should ask simple questions to determine whether it is a security, and that the court shouldn't become involved in the "convoluted analyses" given by the SEC.


It sparked queries such as "When was the purported security sold?" Which buyer was it? To whom do we owe the credit for this sale? At what cost did you offer your services?

 

Taken from the legal document filed on August 18th. Source: JFB Legal


In addition, Gemini insisted that the SEC prioritize the identification of the unregistered security before the sale or offer to sell. The SEC, it was said, had failed to do so.

 

In a court filing dated May 27, Gemini contended that the transactions conducted within the Gemini Earn program amounted to essential loans and asked that the SEC dismiss the complaint. 


According to a comment→ made by Gemini's lawyer, Jack Baugham, on X (previously Twitter) on August 19, the SEC may be shifting its position in the ongoing dispute.


There is a crisis at the SEC. The regulator's rationale is so muddled that, as Baugham pointed out, "they can't even decide what the security is."


They insist that the Loan Agreement constituted a security instrument. On the other side, they assert that every aspect of the Gemini Earn program is a security, which is a ludicrous argument on its face."