Gemini files brief in lawsuit against SEC, requests to keep it simple

“Section 5 of the securities act is not difficult to comprehend” the filing mentioned, while arguing that the SEC has not clearly pointed out the requirements for declaring a violation of the act:”The reality that the SEC can not choose what is the security at concern only underscores the weakness of its position.”It further argued that the court should not tackle the “complicated analyses” provided by the SEC, however rather present straightforward concerns to identify if it certifies as a security or not.It triggered questions including: When was the supposed security offered? Source: JFB LegalGemini also contended that the SEC needs to determine the unregistered security initially, and then determine the sale or the deal to sell that security.

Cryptocurrency exchange Gemini has filed a reply quick as part of its effort to dismiss the suit it is facing against the United States Securities and Exchange Commission (SEC). The lawsuit alleges that “Gemini Earn”– a service enabling clients to provide crypto properties like Bitcoin (BTC) to Genesis– breached securities policies by using unregistered securities. According to Aug. 18 court documents, submitted in the U.S District Court for the Southern District of New York, Gemini has argued that the SEC has actually failed to mention a claim. “Section 5 of the securities act is not difficult to understand” the filing specified, while arguing that the SEC has not clearly explained the requirements for claiming an infraction of the act:”The fact that the SEC can not decide what is the security at issue just highlights the weak point of its position.”It even more argued that the court should not take on the “complicated analyses” presented by the SEC, but rather pose uncomplicated questions to determine if it qualifies as a security or not.It prompted concerns consisting of: When was the alleged security sold? Who was the buyer? Who was the seller? What cost was used or charged?Extract from the Aug. 18 court filing. Source: JFB LegalGemini also competed that the SEC needs to determine the unregistered security first, and then identify the deal or the sale to sell that security. Gemini claimed that the SEC has stopped working to fulfill this requirement. “However, the SEC has not fulfilled that problem, and its opposition avoids the question before the court,” the filing stated.Related: SEC claims: 68 cryptocurrencies are now viewed as securities by the SECOn May 27, Gemini argued in a court filing that transactions performed within the Gemini Earn program were essentially loans, asking for that the SEC to dismiss the problem. On Aug. 19, Jack Baugham, a founding partner of JFB Legal, which represents Gemini, made a statement on X (previously Twitter), suggesting that the SEC is changing its argument as the suit goes on. “The SEC is floundering. They cant even decide what the security is,” Baugham mentioned, noting the confusing nature of its argument:”On the one hand, they claim that the Loan Agreement was a security. On the other hand, they claim that the whole Gemini Earn program was itself a security– an argument ridiculous on its face.”Magazine: Deposit danger: What do crypto exchanges actually do with your cash?

Other Questions People Ask

What are the main arguments in Gemini's brief against the SEC?

In its brief, Gemini argues that Section 5 of the Securities Act is straightforward and that the SEC has failed to clearly outline the requirements for declaring a violation. The filing emphasizes that the SEC's inability to define what constitutes a security weakens its position. Additionally, Gemini contends that the court should focus on simple questions rather than the complex analyses proposed by the SEC.

How does Gemini define the transactions within its Earn program in relation to the SEC lawsuit?

Gemini claims that transactions conducted through its Earn program should be classified as loans rather than securities. This distinction is crucial for their argument against the SEC's allegations of offering unregistered securities. By framing these transactions as loans, Gemini seeks to demonstrate that they do not fall under the SEC's jurisdiction regarding securities regulations.

What specific questions does Gemini suggest the court should consider in its lawsuit against the SEC?

Gemini suggests that the court should focus on straightforward questions such as when the alleged security was sold, who the buyer and seller were, and what price was charged. These questions aim to clarify the nature of the transactions in question and determine if they qualify as securities. By simplifying the inquiry, Gemini believes it can effectively counter the SEC's complex arguments.

What does Gemini argue about the SEC's approach to defining securities in this case?

Gemini argues that the SEC has not adequately defined which specific security is at issue in their lawsuit. They contend that without this clear identification, the SEC's claims lack merit. This argument highlights Gemini's position that the SEC's shifting definitions and analyses create confusion and undermine their case against Gemini.

How has Gemini's legal team responded to the SEC's evolving arguments during the lawsuit?

Gemini's legal team has pointed out that the SEC appears to be struggling with its own arguments as the lawsuit progresses. They note that the SEC has made contradictory claims regarding whether individual agreements or the entire Earn program should be classified as securities. This inconsistency is highlighted by Jack Baugham, a founding partner of JFB Legal, who describes it as a sign of the SEC's confusion in handling the case.