Gemini, a cryptocurrency exchange, has submitted a reply brief in an effort to have the case against the Securities and Exchange Commission of the United States (SEC) dismissed.
According to the lawsuit, Gemini Earn, a program that lets users lend digital assets like Bitcoin to Genesis, violated securities laws by providing unregistered securities.Gemini asserted that the SEC has not made a clear claim, according to court documents submitted on August 18 to the U.S. District Court for the Southern District of New York.The complaint claimed that the SEC has not made explicit the standards for alleging a violation of the securities act, saying that section 5 is “not difficult to understand.”
“The fact that the SEC cannot decide what is the security at issue only underscores the weakness of its position.”
Furthermore, it contended that the SEC should put forth simple tests to evaluate whether it meets the requirements for being a security rather than presenting “convoluted analyses” to the court.It raised a number of queries, such as: When was the supposed security sold? One who purchased?The seller’s name was?What was the cost, either offered or imposed?
The SEC, according to Gemini, must first identify the sale or offer to sell the unregistered security before highlighting the registered one.It stated that the SEC had not accomplished this.“However, the SEC has not met that burden, and its opposition avoids the question before the court,” the filing stated.
Gemini requested that the SEC dismiss the complaint on May 27 in a court filing where it claimed that transactions made through the Gemini Earn program were effectively loans.An assertion that the SEC is altering its defense as the lawsuit progresses was made on X (formerly Twitter) on August 19 by Jack Baugham, a founding partner of JFB Legal, the firm that represents Gemini.
“The SEC is floundering. They can’t even decide what the security is,” Baugham stated, highlighting the confusing nature of the regulator’s argument. “On the one hand, they claim that the Loan Agreement was a security. On the other hand, they claim that the entire Gemini Earn program was itself a security — an argument absurd on its face.”