Gemini files to dismiss SEC’s lawsuit over its earn product

Would You like a feature Interview?


All Interviews are 100% FREE of Charge

Cryptocurrency exchange Gemini Trust and bankrupt lender Genesis Global Capital have jointly filed to dismiss a lawsuit filed by the Securities and Exchange Commission (SEC). The lawsuit alleges that the company’s Earn products violated securities regulations by offering unregistered securities.

In legal filings, the companies said: fought Its “Earn” product, which facilitates coin lending for yield generation, should not be classified as a security. Genesis further argued that the transaction was essentially a loan and asked the court to dismiss the complaint or, alternatively, vacate the SEC’s request for a permanent injunction and debt forgiveness.

Additionally, the allegations allege that Gemini, not Genesis, was responsible for the customer-facing aspects of the Earn program. Gemini, who claimed his role as Earn’s transfer agent, criticized the SEC lawsuit as “naive” in his updated blog. dealt with to acquire users.

Genesis has since filed for bankruptcy following an SEC lawsuit in January, and Earn users will face withdrawal limits starting in mid-November. In response, Gemini filed a blanket claim on Monday, May 22, aimed at recovering over $1.1 billion in assets for the benefit of its 232,000 Earn users.

Gemini, Genesis and their parent company Digital Currency Group are in arbitration talks this month to reach a restructuring and settlement agreement.a spare A deal from February has yet to be finalized and earlier this month DCG announced Missed A $630 million loan payment to Genesis.

Related:Coinbase Continues Efforts To Seek SEC Response To Rulemaking Petition

Throughout this month, Gemini, Genesis and their parent company Digital Currency Group (DCG) have been in brokerage talks to reach a restructuring and settlement agreement. A provisional agreement was proposed in February but has yet to be formally concluded. Additionally, earlier this month, DCG defaulted on a $630 million loan to Genesis.

At the same time, Gemini and other creditors are cooperating on a “modified recovery plan” that can proceed on its own if the mediation process fails. As the exchange states in a blog post, its purpose is to ensure optimal results for Earn users.

and TweetJack Bowman, a founding partner at JFB Legal, which is handling the lawsuit, said the SEC lawsuit is only making it more difficult and complicated to recover assets from the Genesis bankruptcy and complete Earn Users. rice field. It does nothing to speed up the process and unlock assets that need to be returned to Earn users.

magazine: Crypto Regulation: Does SEC Chairman Gary Gensler Have the Final Decision?