Genesis Global Holdco and Gemini have filed a motion to dismiss the Securities and Exchange Commission’s (SEC) lawsuit against their joint Earn program, which the agency launched in January 2023.
The suit alleged that the companies were offering unregistered securities, affecting the interests of 340,000 investors.
Tyler Winklevoss, the co-founder of Gemini, called the SEC allegations “super flimsy” and “a trumped up penalty ticket.”
In the filed motion, lawyers for Genesis Global Holdco and Gemini argued that the SEC’s argument that the Tripartite Digital Asset Loan Agreement (MDALA) offered between the two companies and Earn users constituted an unregistered securities does not have a legal or factual basis.
They also noted that the agency was unable to “properly prove” that the MDALA was an investment contract, as well as provide evidence that the agreements were distributed to third parties.