Crypto exchange Gemini and financial services firm Genesis petitioned to drop a lawsuit filed by the Securities and Exchange Commission earlier this year.
Genesis and Gemini Request SEC Litigation Regarding Lending Product Dropped
The SEC sued the two companies in January, arguing that the Earn program constitutes an unregistered offering and sale of securities under US law.
In its filing with the court, Genesis argued that Earn produced loans, not securities, and argued that the SEC "failed to reasonably assert the facts that would convert those loans into investment contracts or securities."
Similarly, Gemini wrote in her application, "The SEC is trying to turn the Earn program into something it's not." said.
The moves made to drop the lawsuit are not surprising, and both firms have previously pledged to fight the lawsuit.
In January, Gemini co-founder Tyler Winklevoss tweeted, "We look forward to defending ourselves against this fabricated punishment."
The lawsuit represented another pillar of the SEC's continued crackdown on the crypto space. SEC Chairman Gary Gensler raised red flags on crypto-related lending in a press release announcing the agency's enforcement action against Genesis and Gemini.
"The charges today are based on previous actions to make available to the market and the investing public that crypto lending platforms and other intermediaries must comply with our time-tested securities laws," Gensler said in a press release at the time the lawsuit was filed.
*Not investment advice.