This was revealed when Genesis halted withdrawals from the platform in November, shortly before seeking bankruptcy protection in the United States. In the original complaint, the SEC highlighted that Genesis held approximately $900 million in assets belonging to around 340,000 investors using Gemini Earn. It argued that the SEC did not present factual allegations of the contract being sold to anyone or any party offering to sell it, rendering their claims unsubstantiated and speculative. The motion to dismiss the document claimed that the SEC failed to provide sufficient evidence to establish MDALA as a security. However, it did not require any lending or borrowing on its part, and there was no provision for a lender to transfer or assign the program without the consent of all relevant parties.įurthermore, Gemini disputed the SEC’s classification of the tri-party Master Digital Asset Loan Agreement (MDALA) contract between Genesis, Gemini, and Earn users as an unregistered security, asserting that such characterisation lacked legal and factual foundation. Gemini stated that with their Earn program, both the borrower and lender could engage in subsequent transactions. The SEC’s complaint stated that Genesis, affiliated with CoinDesk and owned by the Digital Currency Group (DCG), utilised investors’ crypto assets at its discretion to generate revenue and pay interest to Gemini Earn investors. 12, specifically targeted Gemini’s Earn product, which the SEC claimed was an unregistered offering that generated billions of dollars worth of crypto assets from numerous investors.ġ/ I and the team are proud to represent Today we filed our motion to dismiss the ill-conceived lawsuit against Gemini and Genesis relating to the Earn program. The lawsuit, filed in a New York court on Jan. According to the filings, the SEC accused the two companies of selling unregistered securities.
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