PSEC Calls Gemini Derivatives An Unregistered Securities Product

The Philippines Securities and Exchange Commission (PSEC) has issued an advisory warning the public not to invest in Gemini’s Gemini Derivatives product.

Gemini Derivatives is available to users on the crypto exchange’s new Foundation platform and was launched on the 1st of May, 2023.

Philippines SEC Issues Warning

In its advisory, the Philippines Securities and Exchange Commission stated that Gemini’s newly launched derivatives platform had not obtained prior regulatory authorization to operate in the country. The country’s regulatory watchdog issued an official warning to the cryptocurrency exchange on the 18th of May. According to Philippine law, derivatives are considered as securities and must be registered with the Philippines Securities and Exchange Commission. In its statement, the regulatory authority stated that Gemini did not have the necessary authority or licensing to operate in the country.

The Philippines Securities and Exchange Commission also outlined the punishment for breaching the rules governing the country’s securities regulations. According to the authorities, dealers, brokers, salespeople, or agents that promote or sell unregistered securities in the country face paying a fine of 5 million pesos ($89,286). Additionally, they also face a 21-year prison sentence.

The Philippines Securities and Exchange warning also mentioned the complaints against Gemini’s Earn Program by the United States Securities and Exchange Commission and the Commodity Futures Trading Commission. The SEC had filed a complaint against the Earn Program in January.

“Today’s charges build on previous actions to 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. […] It’s not optional. It’s the law.”

New Platform, Same Headache

Cryptocurrency exchange Gemini launched its non-US derivatives platform, called the Gemini Foundation, at the beginning of May. The announcement featured a long list of supported regions, including the Philippines. However,

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Author: Amara Khatri

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