Gemini, which is a crypto exchange, along with Genesis, which is involved in providing financial services, have together filed a petition regarding the absolving of a lawsuit that was initiated by the Securities and Exchange Commission (SEC). This was carried out sometime towards the beginning of the year 2023.
The lawsuit that was filed was regarding the Earn program, which according to them, stood for an offer made which was not listed, along with the selling of securities, which also was not in compliance with the relevant laws in the U.S.
In response to this, Genesis put forward its point that by Earn, the meaning was the building of loans, and nowhere was anything mentioned about securities. In their opinion, the SEC has come to the wrong conclusion about transforming the loans and making them into investment contracts, or for that matter, security notes, which was never their intention. Gemini, too, pitched in with their statement that the Earn program, as construed by the SEC, never ever signified the selling of unregistered securities.
This petition for the nullification of the lawsuit does not come as an unexpected occurrence because of the fact that earlier this year, the Co-Founder of Gemini, Tyler Winklevoss, through a tweet, had mentioned they would be safeguarding themselves from the allegations put forward by the SEC.
As a part of its fight and clamping down on the crypto arena, this is just another lawsuit being filed by the Securities and Exchange Commission. A press release regarding the action taken against Genesis and Gemini was also issued by the SEC Chair, Gary Gensler. According to him, this is to create awareness in the minds of crypto lending platforms that they have no option but to strictly adhere to the security laws that have been put in place.