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Crypto exchange Gemini is calling out the U.S. Securities and Exchange Commission (SEC) in its lawsuit over the platform\u2019s Earn program.<\/p>\n
In a lengthy post, Gemini lawyer Jack Baughman says<\/a> that the SEC\u2019s lawsuit targeting the protocol\u2019s Earn program, which allowed customers to loan their digital assets to crypto firm Genesis as a means of earning interest, is \u201cabsurd\u201d and contradictory.<\/p>\n \u201cThe SEC is floundering. They can\u2019t even decide what the security is. 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 \u2013 an argument absurd on its face. <\/em><\/p>\n Another absurdity is the SEC\u2019s efforts to identify a \u2018sale.\u2019 They never do, and instead fall back on arguments like this: Gemini and Genesis \u2018did in fact sell their promise to pay interest in exchange\u2019 for crypto assets. Not only is this factually wrong, it is ridiculous. A sale and a loan are different things. At some point, words must mean something.\u201d <\/em><\/p>\n Gemini recently filed<\/a> a motion asking the court to dismiss the case, saying that the regulatory agency has not met the burden of proving the existence and sale of a security.<\/p>\n \u201cThe fact that the SEC cannot decide what is the security at issue only underscores the weakness of its position. It also violates fundamental fairness and the requirement of fair notice.<\/em><\/p>\n In any event, even assuming for the sake of argument that SEC has somehow described a security (under either of its inconsistent theories), it has not plausibly alleged that such security was ever sold or offered for sale. The Court does not need to engage in any of the convoluted analyses advanced by the SEC.\u201d <\/em><\/p>\n The SEC originally sued <\/a>Gemini in January on allegations that the company was selling unregistered securities. Weeks later, SEC Chair Gary Gensler deemed<\/a> every digital asset other than Bitcoin (BTC<\/a>) as a security.<\/p>\n Don’t Miss a Beat \u2013 Subscribe<\/a> to get email alerts delivered directly to your inbox <\/span><\/em>
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