- Cryptocurrency exchange Gemini, run by the Winklevoss twins, filed a motion to dismiss a securities violation lawsuit from the SEC.
- The SEC alleged that Gemini’s yield product, Earn, was an unregistered security and that it sold unregistered securities to retail investors.
- Gemini filed a Master Claim to return over $1.1 billion in digital assets to 232,000 Earn users whose loans were active as of January 19th.
Gemini Seeks Dismissal of SEC Lawsuit
On May 26th, cryptocurrency exchange Gemini Trust Co. filed a motion to dismiss the US Securities and Exchange Commissions’ (SEC) lawsuit claiming its yield product “Earn” was an unregistered security. The Winklevoss-run firm maintains no transfer of asset titles occurred and therefore the offering does not qualify as securities. If successful in its dismissal request, this would remove the legal pressure put on Gemini by the SEC.
SEC Allegations Against Gemini and Genesis Global
In January 2021, the SEC issued a complaint against both Gemini and Digital Currency Group subsidiary Genesis Global Capital for allegedly selling unregistered securities through their lending program. It was claimed that hundreds of thousands of investors had been involved with billions of dollars worth of crypto assets being exchanged between them. Furthermore, agent fees as high as 4.29 percent were purportedly deducted from customer accounts without registering with the Commission first.
Gemini Files Master Claim To Return Funds
In response to these allegations, Gemini filed a Master Claim on May 22nd with an effort to return over $1.1 billion worth of digital assets locked in Genesis’ custody back to 232,000 Earn users who had loaned money prior to January 19th when withdrawals became frozen due to bankruptcy proceedings initiated by DCG’s subsidiary company at this time.