According to the Reuters reportGemini requested the SEC’s lawsuit be dismissed.
The exchange, run by brothers Tyler and Cameron Winklevoss, has asked a US judge to dismiss a lawsuit filed by the SEC regarding the illegal sale of securities.
On January 12, the SEC filed a lawsuit against Gemini and Genesis, the crypto lending firm of Digital Currency Group.
The regulator’s target was the Gemini Earn program, in which Gemini and Genesis are partners. Gemini had entrusted client funds to Genesis through the program. The exchange was also earning a relatively high brokerage fee of 4.29% from this program.
According to the regulator, the Gemini Earn program has enabled Genesis and Gemini to raise billions of dollars in crypto assets.
SEC revealed data
The regulator claimed that Genesis holds $900 million in cryptocurrencies from approximately 340,000 Gemini Earn customers. Gemini and Genesis were accused of violating the regulator’s disclosure requirements to protect investors.
In the filing, Gemini argued that as a result of the agreements made between Genesis and customers, the assets were not bought or sold in the secondary markets, there was no transfer of ownership rights and therefore could not be qualified as a security.
The SEC declined to comment on the matter. Similarly, Genesis’s lawyers left their requests for comment unanswered.
The SEC’s 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 due to its staking program.