Gemini files brief in lawsuit against SEC, requests to keep it simple
Cryptocurrency exchange Gemini has filed a reply brief as part of its effort to dismiss the lawsuit it is 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 in the U.S District Court for the Southern District of New York, Gemini has argued that the SEC has failed to state a claim.
“Section 5 of the securities act is not hard to understand” the filing stated, while arguing that the SEC has not clearly pointed out the requirements for claiming a violation of the act:
“The fact that the SEC cannot decide what is the security 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 rather pose straightforward questions to determine if it qualifies as a security or not.
It prompted questions including: When was the alleged security sold? Who was the buyer? Who was the seller? What price was offered or charged?
Gemini also contended that the SEC needs to pinpoint the unregistered security first, and then identify the sale or the offer to sell that security. Gemini claimed that the SEC has failed to fulfill this requirement.
“However, the SEC has not met that burden, and its opposition avoids the question before the court,” the filing stated.
Related: SEC lawsuits: 68 cryptocurrencies are now seen as securities by the SEC
On May 27, Gemini argued in a court filing that transactions carried out within the Gemini Earn program were essentially loans, and for the SEC to dismiss the complaint.
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 as the lawsuit goes on.
“The SEC is floundering. They can’t even decide what the security 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 other hand, they claim that the entire Gemini Earn program was itself a security — an argument absurd on its face.”
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Sir Keir Starmer continues to face the threat of a major rebellion during a key vote on welfare reforms later – despite making last-minute concessions to disgruntled Labour MPs.
Work and Pensions Secretary Liz Kendall has confirmed that all existing claimants of the personal independence payment (PIP), the main disability benefit, will be protected from changes to eligibility.
The combined value of the standard Universal Credit allowance and the health top-up will rise “at least in line with inflation” every year of this parliament.
And an additional £300m for employment support for sick and disabled people in 2026 has been announced, which will rise every year after.
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Welfare cuts ‘needed to be made’
Ms Kendall has also promised that a consultation into PIP – “co-produced” with disabled people – will be published next autumn.
She said the U-turn on welfare cuts will cost taxpayers about £2.5bn by 2030 – less than half the £4.8bn the government had expected to save with its initial proposals.
Modelling by Ms Kendall’s own department, released yesterday, suggested the proposals would push 150,000 more people into poverty by 2030, down from the 250,000 estimated under the original plan.
But after announcing the U-turns, Labour MPs were still publicly saying they could not back the plans as they do not go far enough to allay their concerns.
Disabilities minister Stephen Timms would not say he was “confident” the proposals would pass the Commons when asked on Sky News’ Politics Hub with Sophy Ridge.
“We’ve got a very strong package, I certainly hope it passes,” he replied.
Read more: What are the concessions to the welfare reform bill?
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‘Disabled people thrown under the bus’
A total of 86 charities united yesterday to call on MPs to reject the reforms, saying they will harm disabled people and calling it “a political choice”.
The likes of Oxfam, Child Action Poverty Group, Mind and Shelter said the bill has been brought to a vote without consulting disabled people and without any assessment “of its impact on health and employment outcomes”.
When asked to name “a single” disability organisation in favour of the reforms, Ms Kendall declined to do so.
Several Labour MPs indicated they would still vote against the changes, leaving the government in the dark over how big a rebellion it still may face.
Ms Kendall tried to allay their fears, telling MPs: “I believe we have a fair package, a package that protects existing claimants because they’ve come to rely on that support.”
Richard Burgon presented a petition to parliament yesterday evening against the cuts, signed by more than 77,000 people.
Several Labour MPs questioned why the vote was going ahead before the review into PIP is published – including Rachael Maskell, who said she could not “countenance sick and disabled people being denied support” and added: “It is a matter of conscience.”
Connor Naismith said the concessions “undoubtedly improve efforts to secure welfare reform which is fair”, but added: “Unfortunately, I do not believe these concessions yet go far enough.”
Labour rebel Nadia Whittome said the government was ‘ignoring’ disabled people
Nadia Whittome accused the government of “ignoring” disabled people and urged ministers to go “back to the drawing board”.
Ian Byrne told the Commons he will vote against the “cruel cuts” to disability benefits because the “so-called concessions go nowhere near far enough”.
The vote will take place this evening, with coverage on Sky News’ Politics Hub live blog and on TV.
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