Cryptocurrency exchange Gemini has filed a reply transient as a part of its effort to dismiss the lawsuit it’s facing against the United States Securities and Exchange Commission (SEC).
The lawsuit alleges that “Gemini Earn” – a service enabling customers to lend crypto assets like Bitcoin (BTC) to Genesis – breached securities regulations by offering unregistered securities.
According to Aug. 18 court documents, filed within the U.S District Court for the Southern District of New York, Gemini has argued that the SEC has did not make a transparent claim.
“Section 5 of the securities act will not be hard to know” the filing stated, while arguing that the SEC has not clearly identified the necessities for claiming a violation of the act:
“The indisputable fact that the SEC cannot determine what’s the safety at issue only underscores the weakness of its position.”
It further argued that the court shouldn’t tackle the “convoluted analyses” presented by the SEC, but quite pose straightforward inquiries to determine if it qualifies as a security or not.
It prompted questions including: When was the alleged security sold? Who was the customer? Who was the vendor? What price was offered or charged?
Gemini also contended that the SEC needs to spotlight the unregistered security first, after which discover the sale or the offer to sell that security. It claimed the SEC has not fulfilled this.
“However, the SEC has not met that burden, and its opposition avoids the query before the court,” the filing stated.
Related: SEC lawsuits: 68 cryptocurrencies are actually seen as securities by the SEC
On May 27, Gemini argued in a court filing that transactions carried out throughout the Gemini Earn program were essentially loans, requesting that the SEC to dismiss the criticism.
On Aug. 19, Jack Baugham, a founding partner of JFB Legal, which represents Gemini, made a statement on X (formerly Twitter), suggesting that the SEC is changing its argument because the lawsuit goes on.
“The SEC is floundering. They can’t even determine what the safety is,” Baugham stated, noting the confusing nature of its argument:
“On the one hand, they claim that the Loan Agreement was a security. On the opposite hand, they claim that your complete Gemini Earn program was itself a security — an argument absurd on its face.”
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