The exchange, run by twins Tyler and Cameron Winklevoss, was sued Friday by the Securities and Exchange Commission for illegally selling unregistered securities in a program that promised high interest rates to hundreds of thousands of investors. asked a U.S. judge to dismiss the
Gemini Trust’s request was filed in Manhattan federal court in response to the SEC’s Jan. 12 civil lawsuit against the exchange and cryptocurrency lender Genesis Global Capital LLC, a division of the Digital Currency Group. It has been submitted.
The SEC filed a lawsuit against Gemini Earn, whose customers loaned Bitcoin and other crypto assets to Genesis, and Gemini took a hefty 4.29% brokerage fee.
The program allowed Gemini and Genesis to raise billions of dollars in crypto assets, according to regulators, but Genesis shut down last year after the collapse of Sam Bankman-Fried’s crypto exchange FTX. I stopped withdrawing money for the month.
According to the SEC, Genesis held $900 million in assets from approximately 340,000 Gemini Earn customers. Gemini and Genesis have been accused by regulators of circumventing disclosure requirements aimed at protecting investors.
In Friday’s filing, Gemini said the financing agreements between itself, Genesis and its customers were not sold or traded on the secondary market, nor did they transfer ownership of the assets, and therefore were not classified as securities. said he was not eligible for
“Therefore, there was no requirement that any party register it with the SEC,” the report said.
The SEC declined to comment.
A lawyer for Genesis did not immediately respond to a request for comment, but said it would also seek a dismissal.
The SEC has been cracking down on the cryptocurrency market since Gary Gensler took over as chairman in 2021.
In January, he said the lawsuits against Gemini and Genesis would help “make it clear to the market and public investors that crypto lending platforms and other intermediaries must comply with proven securities laws.” rice field.
The action is SEC v. Gemini Trust Co et al, United States District Court, Southern District of New York, No. 23-00287. (Reporting by Jonathan Stempel in Chicago; Editing by David Gregorio)
