- Gemini Trust Company files a reply brief requesting the court to dismiss the SEC lawsuit against the exchange.
- The lawsuit claimed that the platform traded unregistered securities and amassed billions worth of crypto assets from investors.
- The exchange asserts that the SEC has failed to produce a clear explanation for its claims.
Gemini Trust Company, an American crypto exchange, filed a reply memorandum in the U.S District Court for the Southern District of New York, against the US Securities and Exchange Commission (SEC) in an attempt to dismiss the ongoing SEC-Gemini lawsuit.
Earlier this year, the US regulators sued the crypto firms Gemini and Genesis Global Capital for allegedly trading unregistered securities through the Gemini Earn crypto asset lending program. Claiming that the sale of unregistered securities has helped the platforms to amass billions of dollars worth of crypto assets from the customers, the SEC revealed that the platforms were under scrutiny. The lawsuit came following the investors’ lawsuit against Gemini and its co-founders, accusing them of fraudulent activity.
Subsequently, Genesis and Gemini sought to dismiss the lawsuit arguing that the Gemini Earn should not be considered a security. Both companies requested the court to dismiss the complaint on the basis that the transactions were essentially loans. In addition, Gemini addressed the lawsuit as “ill-conceived” via an official blog post.
On August 18, Gemini filed the memorandum requesting the court to nullify the SEC’s lawsuit against the exchange, asserting that it holds unclear allegations and indefinite arguments. The platform stressed that though Section 5 of the securities act is “not hard to understand”, the regulators failed to provide a clear statement. Gemini added, “The fact that the SEC cannot decide what is the security at issue only underscores the weakness of its position”.
Pointing out that the regulators have been muted to the crucial questions regarding the sale of the deemed unregistered securities, the platform requested the court to dismiss the “convoluted” statements put forward by the SEC. Gemini also highlighted the basic legal principles that support its request for the dismissal of the lawsuit. As per the document, a claim must be “plausible” and it should not be based on “conclusory allegations”.
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