The cryptocurrency platform Gemini has gone to court in response to inquiries from the SEC (Securities and Exchange Commission). The beginning of the week brought another chapter in the unfolding case when Gemini filed a motion to dismiss the case in the District Court for the Southern District of New York. But what exactly caused this confrontation?
In recent years, cryptocurrencies have become one of the most discussed topics in the world of finance. From earnings on price rises and falls to the legal battle between cryptocurrency platforms and government institutions, the landscape of this innovative field is full of surprises. Among them now is Gemini’s attempt to free itself from SEC investigations.
The motion filed in the District Court for the Southern District of New York (SDNY) by Gemini contained a request from the platform’s lawyers to dismiss the case brought against them by the SEC. The reason? Unclear accusations. In other words, Gemini claims it is not even clear what the charges entail. This uncertainty differs from the reasons of other platforms, such as Binance, Coinbase, and Bittrex (the latter of which settled out of court), which sought dismissal on the grounds of improper jurisdiction and overreach.
One of the key arguments put forth by Gemini was that the SEC would have to identify exactly which security is in dispute and confirm that it was indeed sold. Gemini’s lawyers argue that these two conditions were not met, invalidating the complaint.
Surprisingly, according to the SEC, there are two different securities in this case: the Master Digital Asset Loan Agreement (MDALA) and the Gemini Earn program itself. Gemini counters by arguing that the SEC’s complaint does not specify such a charge, and the fact that the commission cannot decide which of these two things is actually a security underscores the weakness of its position.
Moreover, regarding the Gemini Earn program, the platform’s lawyers believe that there was never a sale of a security. The only transactions that took place within the program are loans and their repayment.
The key question remains: was there actually a sale of securities? Even if the court decides that both alleged offers are indeed securities, the SEC has not presented convincing evidence that a sale actually took place.
In light of this, Gemini’s lawyers argue that the court should independently determine whether the SEC’s complaints meet the criteria for a valid lawsuit. If the court comes to the same conclusion as the Gemini platform, it is expected that the case will be dismissed.
Now everything rests in the hands of the District Court for the Southern District of New York (SDNY). The decision they make will impact not only the future of Gemini but also the entire cryptocurrency industry.
The Gemini versus SEC case is another example of the complex relationship between the cryptocurrency market and regulatory bodies. As always in such situations, the final verdict may have far-reaching consequences for the entire industry.
