Gemini Responds to SEC Lawsuit Over Alleged Unregistered Securities

blockchain.news:

Cryptocurrency exchange Gemini has filed a reply brief in response to a lawsuit initiated by the United States Securities and Exchange Commission (SEC). The lawsuit, which is being heard in the U.S. District Court for the Southern District of New York, alleges that Gemini's service, Gemini Earn, violated securities regulations by offering «unregistered securities.»

A Robust Defense

Gemini's legal defense, represented by firms JFB LEGAL, PLLC, and SHEARMAN & STERLING LLP, has been robust. The reply brief, dated August 18, 2023, challenges the SEC's claims, arguing that their complaint is based on «conclusory statements» and lacks concrete evidence. Specifically, Gemini's defense has highlighted the SEC's failure to answer pivotal questions, such as when the alleged security was sold, who were the buyer and seller, and at what price it was offered.

Gemini Earn at the Center of Controversy

The core of the lawsuit revolves around the Gemini Earn service, which facilitates customers in lending crypto assets like Bitcoin to Genesis. The SEC asserts that this service breached securities regulations. However, Gemini has consistently contested this claim. On May 27, the exchange posited that transactions within the Gemini Earn program were essentially loans, urging the SEC to dismiss the complaint based on this perspective.

Adding to the public discourse, Jack Baugham, a founding partner of JFB Legal, made a statement highlighting the inconsistent nature of the SEC's arguments. He described the regulator's approach as «floundering» and emphasized the contradictory facets of their claims.

Previous Legal Challenges

Earlier in the year, the legal waters were further muddied when US regulators initiated a lawsuit against