According to a Friday report, Gemini, the cryptocurrency exchange of the Winklevoss twins, asked a US judge to dismiss an SEC lawsuit targeting their company. The Commission filed a complaint in January alleging that the firm was offering unregistered securities through Gemini Earn.
Gemini Claims it Never Offered Securities Through Earn Platform
This Friday, Gemini requested a US Judge dismiss an SEC complaint filed in January. The lawsuit alleges that both the Winklevoss twins’ company and Genesis violated securities laws through the former’s Gemini Earn platform.
Gemini reportedly argues that since the loan agreements on the loan platform were neither traded on secondary markets, nor transferred titles to the asses, nor were sold, they can’t have constituted unregistered securities offerings. The company’s lawyers also stated that there was no need for Gemini or Genesis to register with the Commission.
Genesis Global, the other company targeted by the complaint, filed for bankruptcy in the second half of January. Additionally, Gemini terminated its Earn program earlier in the same month.
SEC’s Crackdown on Crypto Earn Products
While the Securities and Exchange Commission has noticeably stepped up its effort in cracking down on the entire cryptocurrency industry, various yield-bearing products have been of particular concern. The CEO of Coinbase, Brian Armstrong, stated in February that the SEC may be moving to ban staking entirely in the US.
Around the same time, the Commission announced it had reached a $30 million settlement with the cryptocurrency exchange Kraken. In accordance with the settlement, Kraken terminated its staking service soon after and unstaked all cryptocurrency within the shortest possible timeframe.
For his part, the SEC Chair Gary Gensler stated in an interview that there is little difference between yield-bearing products offered by cryptocurrency firms and that they overwhelmingly constitute unregistered securities. Gensler also warned that most of the cryptocurrency industry is not compliant with the existing laws.