Philippines SEC says Gemini’s derivatives exchange is operating without approval

The Philippines Securities and Exchange Commission issued a warning to investors that Gemini is operating its newly launched derivatives exchange without regulatory authorization in the country, Bloomberg News reported on May 22.

The watchdog issued an official warning to the exchange on May 18, according to the report.

Breaching the country’s securities regulation comes with a 21-year jail sentence or a fine of roughly $90,000 if found guilty.

Gemini Foundation

Gemini launched its non-US derivatives platform Gemini Foundation in May, with the Philippines listed as one of the supported regions. However, the country’s regulators claim the exchange has no legal right to operate in the country as it has not secured approvals for its products.

The SEC added that Gemini has been marketing derivatives, which are essentially considered securities in the Philippines, and has not secured regulatory approval to sell securities.

According to the Philippines SEC:

“Gemini Trust Company LLC’s lack of prior registration with the Commission makes their activities of offering and/or selling securities in the form of derivatives illegal in violation of the provisions of the SRC.”

The regulator advised the public to avoid investing in the exchange and halt any ongoing investments until further notice as the Gemini Foundation does not have the “necessary license and/or authority to solicit, accept or take investments/placements from the public nor to issue securities.”

Gemini Foundation was set up to avoid regulatory uncertainty and hurdles for the crypto industry in the U.S. However, the Philippines’ action shows that going global comes with its own set of problems for the nascent industry.

Regulatory uncertainty

New York-based Gemini Trust has been facing regulatory pressure in the U.S. and launching the non-U.S. derivatives platform was a way to continue operating regardless of the situation in the U.S. regulatory landscape.

Regulation remains unclear in the country, and regulators have not be

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Author: Assad Jafri

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