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Court Rules Against Gemini, Genesis in SEC Case, Denies Dismissal Motion
- A New York Judge has thrown out Gemini, Genesis’ motion for dismissal earlier this week.
- This will allow the SEC to continue with its case against the defunct crypto exchange.
- The SEC “plausibly alleges” that Gemini Earn may have offered unregistered securities.
- Gemini Earn went bankrupt in November 2022, affecting over 300,000 customers.
The US Securities and Exchange Commission (SEC) will get its chance to take on Gemini in court, after a New York judge ruled against the bankrupt crypto company’s motion for dismissal.
Related: End of the Rally? Analyst Predicts Bull Market Peak
The company’s flagship Gemini Earn product, owned by Tyler and Cameron Winklevoss of The Social Network fame, went underwater in November 2022 as part of the crypto exchange contagion. Just a couple of months later, the SEC filed its civil case against the program for offering customers “unregistered securities”.
The Firm “Plausibly” Violated Securities Law
The SEC’s warpath was largely kicked off by the collapse of FTX in 2022, as the onset of 2023 saw the regulatory agency file injunctions against several major crypto exchanges – including Coinbase, Binance and Genesis. The crux of its regulation by enforcement was that these companies supposedly offered unregistered securities. This label is something the SEC has been keen to associate with the crypto industry for years, despite never winning a case based on this assertion.
Nevertheless, the war train may now carry on after Genesis’ May 2023 motion for dismissal was thrown out by a New York judge earlier this week. It means that the SEC can now continue with their legal battle – originally filed over 12 months ago – after the judge said the regulatory body’s complaints were “plausibly allege[d]”.
Related: Judge Rules Crypto Assets Are Securities, Even When Traded on Exchanges
Unfortunately, the protracted legal battle and bankruptcy proceedings will only hurt customers affected by the Gemini Earn failure. With billions of dollars in limbo, the Winkelvoss twins have promised to compensate for all lost money – but only once all the legal stuff has been wrapped up. Knowing the system, this might be years and years away.
Author
Ben Knight
Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.
