According to Gemini, the SEC’s complaint against its “Earn” product, which gave clients rewards in exchange for their cryptocurrency deposits, was “ill-conceived.”
Gemini, a cryptocurrency exchange, and Genesis Global Capital, a cryptocurrency lender, have filed a combined motion to dismiss an SEC case. Gemini Earn, a financing program, is accused of breaking securities laws by providing unregistered securities, according to the lawsuit.
The two businesses contend that Gemini Earn is not a security. Genesis argues that the transactions were loans and asks the court to throw out the complaint or to overturn the SEC’s demands for a disgorgement and permanent injunction.
According to the accusation, Gemini, not Genesis, was in charge of the Earn program’s customer-facing elements. In a blog post directed at Earn users, Gemini called the SEC case “ill-conceived” and decried it.
A restructuring and settlement deal is being negotiated through mediation between Gemini, Genesis, and their parent firm DCG. A tentative agreement from February hasn’t been finalized, but DCG just neglected to pay Genesis $630 million on a loan.
Gemini is currently collaborating with other creditors on a “amended plan of reorganization.” If the mediation procedure does not result in a satisfying agreement, this plan may be pursued independently.