According to a Reuters reportGemini asked the SEC’s case to be dismissed.
The exchange, run by brothers Tyler and Cameron Winklevoss, has asked a US judge to dismiss a lawsuit filed by the SEC over the illegal sale of securities.
On January 12, the SEC filed a lawsuit against Gemini and Genesis, the crypto lending company of Digital Currency Group.
The regulator’s target was the Gemini Earn program, where Gemini and Genesis are partners. Gemini had entrusted client funds to Genesis through the scheme. The exchange was also getting a relatively high brokerage fee of 4.29% from this deal.
According to the regulator, the Gemini Earn program has enabled Genesis and Gemini to raise billions of dollars in crypto assets.
The SEC disclosed the data
The regulator claimed that Genesis holds $900 million in cryptocurrencies from about 340,000 Gemini Earn customers. Gemini and Genesis were accused of violating the regulator’s disclosure requirements to protect investors.
In opening the file, Gemini claimed that due to the agreement made between Genesis and the customers, the properties were not bought or sold in the secondary markets, there is no transfer of ownership rights and therefore they cannot qualify as securities.
The SEC declined to comment on the matter. Likewise, Genesis’ lawyers left their request for comment unanswered.
SEC pressure on the cryptocurrency industry continues to increase. The regulator has also targeted Coinbase, the largest US cryptocurrency exchange. About two months ago, a Wells Notice was sent to Coinbase because of its stock placement plan.