In a recent legal filing, cryptocurrency exchange Gemini has continued its push for the dismissal of the lawsuit brought against it by the United States Securities and Exchange Commission (SEC), asserting unclear allegations and shifting arguments.
The lawsuit centers on the SEC’s claim that Gemini Earn, a service offered by the exchange that allows customers to lend cryptocurrencies such as Bitcoin to Genesis, violated securities regulations by offering unregistered securities.
According to court documents filed on August 18 in the U.S. District Court for the Southern District of New York, Gemini has argued that the SEC has not presented a clear and specific claim. It further maintains that the court should not grapple with the complex analyses put forth by the SEC and urges the agency to pose straightforward questions in order to determine whether the situation qualifies as a security.
Gemini has also contended that the SEC should first identify the unregistered security and then pinpoint the sale or offer to sell that security. It alleges that the SEC has failed to meet this requirement and has not adequately addressed the central issue at hand.
Gemini’s legal representation, Jack Baugham of JFB Legal, emphasized the shifting nature of the SEC’s argument. Baugham pointed out that the regulator’s stance has evolved over the course of the lawsuit. On one hand, the SEC claimed that the Loan Agreement was a security, while on the other hand, it argued that the entire Gemini Earn program constituted a security. This contradictory position has drawn criticism from Gemini and its legal team.
As the legal battle continues, Gemini seeks a resolution that provides clarity and proper examination of the issues at hand, particularly regarding the categorization of the services it offers and their potential classification as securities.