Gemini and Genesis, two cryptocurrency companies, have filed a motion to dismiss a lawsuit filed by the Securities and Exchange Commission (SEC) alleging that their Earn offering violated securities laws.
The Earn offering allowed users to earn interest on their cryptocurrency deposits by lending their coins to Genesis. Genesis then invested the coins in various ways, including lending them to other cryptocurrency companies.
The SEC alleges that the Earn offering was unregistered security because it involved the sale of investment contracts. An investment contract is a contract that gives the buyer the right to participate in the profits of an enterprise.
Gemini and Genesis argue that the Earn offering was not an investment contract because it did not involve the sale of ownership interests in an enterprise. They also argue that the Earn offering was not a security because it was not offered to the public.
The SEC has not yet filed a response to Gemini and Genesis’s motion to dismiss. The case is still ongoing.