Gemini Files Brief in SEC Case, Seeks Dismissal
- Gemini said that the SEC has not clearly pointed out the requirements for claiming a violation regarding its Earn product.
- It said that the fact that the “SEC cannot decide what is the security at issue only underscores the weakness of its position.”
- The firm asked the court not to tackle the “convoluted analyses” presented by the SEC.
- The regulator claims that the exchange’s Earn product breached US securities laws.
The leading crypto exchange founded by the Winklevoss twins, Gemini, has filed a legal brief in its legal battle against the United States Securities and Exchange Commission (SEC). Interestingly, the crypto trading platform filed a motion in court to dismiss the lawsuit in late May, and similar actions have been taken by the largest crypto exchange in the US, Coinbase.
The SEC filed a lawsuit against the exchange headed by Tyler Winklevoss, claiming that Gemini Earn, a service that allowed customers to earn additional money on their deposits while lending their digital assets like Bitcoin (BTC) and Ether (ETH), was found to be breaching securities regulations by offering the sale of unregistered securities.
Similar logic has been used by the SEC to file lawsuits against the world’s largest crypto exchanges, Binance, Coinbase, Kraken, and others. Interestingly, Gemini stated in a court document submitted on August 18 in the US District Court for the Southern District of New York that the securities regulator has failed to make a clear aim.
“Section 5 of the securities act is not hard to understand,” the filing said, while adding that the SEC has not clearly pointed out the requirements for claiming a violation of the act:
“The fact that the SEC cannot decide what is the security at issue only underscores the weakness of its position.”
Additionally, Gemini also stated in the court documents that the court should not tackle the “convoluted analyses” presented by the SEC, adding that the agency is liable to present straightforward answers to the services and assets that qualify as securities.
The crypto exchange demanded answers from the SEC while giving examples of questions like “When was the alleged security sold? Who was the buyer? Who was the seller? What price was offered or charged?”
Gemini said that the SEC first needs to highlight the unregistered security and then identify the sale or offering that it considers security.
“However, the SEC has not met that burden, and its opposition avoids the question before the court,” the filing stated.
As reported earlier by Bitnation, Gemini is looking to expand its presence outside the US because of the regulatory uncertainty in the country surrounding the crypto sector. The exchange recently announced that it will set up an office in India and also debut a non-US derivatives platform in many countries.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
