Crypto
Winklevoss twins’ exchange seek dismissal of SEC lawsuit over Gemini Earn
/cloudfront-us-east-2.images.arcpublishing.com/reuters/45QBAIFFOJL6HBM4RDEJTTC32U.jpg "Winklevoss twins’ exchange seek dismissal of SEC lawsuit over Gemini Earn")
May 26 (Reuters) – An exchange run by the twins Tyler and Cameron Winklevoss on Friday asked a U.S. judge to dismiss a Securities and Exchange Commission lawsuit claiming it illegally sold unregistered securities in a program that promised high interest rates to hundreds of thousands of investors.
Gemini Trust Co’s request was filed in Manhattan federal court, in response to the SEC’s Jan. 12 civil lawsuit against the exchange and the cryptocurrency lender Genesis Global Capital LLC, a unit of Digital Currency Group.
The SEC had sued over Gemini Earn, which let customers lend crypto assets such as bitcoin to Genesis, with Gemini taking an agent fee as high as 4.29%.
According to the regulator, the program let Gemini and Genesis raise billions of dollars of crypto assets, before Genesis halted withdrawals last November in the wake of the collapse of Sam Bankman-Fried’s FTX cryptocurrency exchange.
The SEC said Genesis held $900 million of assets from about 340,000 Gemini Earn customers. Gemini and Genesis were accused by the regulator of having bypassed disclosure requirements meant to protect investors.
In Friday’s filing, Gemini said the loan agreements among itself, Genesis and customers were neither sold nor traded on secondary markets, and did not transfer title to assets, and therefore did not qualify as securities.
“Accordingly, there was no requirement that any party register it with the SEC,” it said.
The SEC declined to comment.
Genesis’ lawyers did not immediately respond to requests for comment, but have said they will also seek a dismissal.
The SEC has been cracking down on cryptocurrency markets since Gary Gensler became its chair in 2021.
He said in January that the case against Gemini and Genesis helps “make clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with our time-tested securities laws.”
The case is SEC v Gemini Trust Co et al, U.S. District Court, Southern District of New York, No. 23-00287.
Reporting by Jonathan Stempel in Chicago; Editing by David Gregorio
Our Standards: The Thomson Reuters Trust Principles.
World’s popular digital currency rises as high as $99,073 on expectations Trump will ease legal and regulatory hurdles.
Bitcoin is nearing the $100,000 mark as crypto enthusiasts bet that United States President-elect Donald Trump will usher in a more welcoming regulatory environment for digital assets.
The world’s most popular digital currency rose as high as $99,073 on Thursday, extending its surge since Trump’s re-election on November 5.
The commodity has risen more than 60 percent since election day as investors anticipate Trump’s incoming administration to ease regulatory and legal hurdles to its use.
Trump, who called the asset a “scam” during his first term, accepted campaign donations in cryptocurrency, and has pledged to make the US “the crypto capital of the planet” and accumulate a national bitcoin reserve.
Trump and his three sons in September also announced the launch of their own crypto business, World Liberty Financial, which investors have taken as a promising sign of the president-elect’s belief in the sector.
In another bullish signal for the sector on Thursday, United States Securities and Exchange Commission (SEC) chair, Gary Gensler, who was widely disliked among crypto investors for his aggressive enforcement actions targeting the sector, confirmed that he would step down in January.
Trump had pledged to fire Gensler on “day one” of his administration, though the president does not have the authority to remove the SEC chair before the end of his or her term.
While viewed by supporters as a ticket to big returns and financial freedom, Bitcoin and other cryptocurrencies are known for their volatility and have faced government crackdowns in several parts of the world.
After climbing to a record high of $69,000 in late 2021, Bitcoin plunged to less than $16,000 over the following year.
The commodity burst past its previous peak in March after gaining more than 300 percent since November 2022.
Crypto
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WisdomTree has launched a new cryptocurrency exchange-traded product (ETP), the US asset manager announced today, with a focus on the XRP digital currency.
The new WisdomTree Physical XRP (XRPW), joins the firm’s $1.1bn lineup of physically backed cryptocurrency products, designed to provide European investors with a straightforward, regulated means of investing in digital assets without direct ownership.
The XRP asset, native to the XRP Ledger (XRPL), has carved out a unique role for itself in the digital currency landscape, as a blockchain optimised for cross-border payments and high-speed transactions.
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