Aaryamann Shrivastava
FXStreet
- Gemini claims that the "ill-concieved lawsuit" is making it harder to retrieve assets from Genesis bankruptcy.
- The motion to dismiss the lawsuit is based on the fact that the Earn program contract is not a security, per SEC's claims.
- Earlier this week, Gemini stated that it would be filing a $1 billion claim against Genesis' parent company Digital Currency Group for missing a $630 million payment.
The Security and Exchange Commission (SEC) is in a whirlwind of criticism from the government to its victims, facing backlash for its "regulation by enforcement" policy. The newest addition to this is Gemini, who first became a victim of SEC in January this year.
Also read - Gemini and Genesis charged by SEC for violating Securities law using the Earn program
Gemini goes after SEC
Crypto service provider Gemini through its legal team, on May 27, announced that a motion to dismiss the SEC's lawsuit had been filed. The lawsuit was filed by the regulatory body against Gemini and Genesis on January 12 for their Earn program.
The SEC claimed that the program was in violation of the law and alleged misconduct from Gemini and Genesis. The latter filed for bankruptcy a week after the lawsuit was filed. In response to these claims, Jack Baughman, founding partner at JFB Legal, stated,
"The SEC claims that the contract setting up the Earn program was itself a security. Even if that were right—it's not—the SEC then would have to show that the contract was sold. That never happened.
He went on to state that due to the regulatory body pursuing the alleged violation of law, it is becoming difficult to retrieve assets from Genesis. These funds will be used to make the Earn users whole again who lost their money when the program came to an end in November 2022.
Gemini to file a billion-dollar claim
In line with recovering the funds earlier this week, Gemini also stated that it plans to file a $1 billion claim against Gemini. This is because Genesis' parent company Digital Currency Group missed a payment of $630 million to its subsidiary Genesis which is currently operating under bankruptcy court protection.
All in all, Digital Currency Group owes more than $1.65 billion to Genesis, which Gemini claims could help in resolving the Earn program claims. While DCG has until May 30 to delay a default, Gemini, in its post-planning the $1 billion claim, read,
"Consideration will be based in part on whether the parties believe DCG will engage in good faith negotiations on a consensual deal.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Crypto liquidations hit $311 million, what’s next?
BTC price has suffered a fatal setback after the recent lawsuit that the SEC filed against Binance and its founder, Changpeng “CZ” Zhao. The suit caused the markets to cascade, triggering a massive sell-off and causing roughly $311 million in liquidations across the entire crypto landscape.
Apple staying mum on Metaverse at WWDC wipes out Metaverse tokens’ value by 10%
Apple recently hosted the WWDC, where it was expected to kickstart the Metaverse hype again. However, with the anticipation going through the roof, the opposite happened when the company with the biggest market cap failed to talk about the virtual world.
Dogecoin price crashes by nearly 12% as loyal investors continue to offload their DOGE
Dogecoin price is currently following Bitcoin’s lead, bringing the meme coin down to three-month lows and testing a key support level. The cryptocurrency has been a highly influenced token for a long time now, but with DOGE’s charm fading away.
Is the metaverse hype back in action?
Although there are no major macroeconomic events this week, investors can expect massive volatility on a daily basis. The reasoning behind this outlook is that Apple will be conducting the 2023 Apple Worldwide Developers Conference (WWDC) on June 5.
Bitcoin: BTC targets $30,000 as short-term bias turns bullish
Bitcoin (BTC) price shows a clear sign of the bulls’ victory. After failing to trigger a steep correction, bears look now out of context, at least in the short term, allowing buyers to restart a minor uptrend.