Philippines SEC Warns Against Gemini Unregistered Derivatives

On its website, the Philippines Securities and Exchange Commission (PSEC) has issued a warning against investing in Gemini’s Gemini Derivatives product.

The product is accessible through the Gemini Foundation platform, which was introduced in certain jurisdictions on May 1.

Under Philippine law, derivatives are securities and must be registered with the PSEC. Gemini lacks the required authorization and licenses to operate in the country.

Salespeople, brokers, dealers, or agents who sell or promote unregistered securities are subject to a fine of up to 5 million pesos ($89,826) or 21 years in prison, according to a statement issued by the agency on May 11, but posted a week later.

The PSEC warning mentions U.S. Securities and Exchange Commission and U.S. Commodity Futures Trading Commission complaints against Gemini and quotes SEC chair Gary Gensler on Gemini’s Earn program, against which the SEC filed a complaint 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.”

According to the May 1 announcement, the Gemini Foundation platform launched in 29 countries, including the Philippines.

It is not offered in the United States, the United Kingdom, or the European Union. It provides a Bitcoin perpetual contract denominated in the native Gemini Dollar (GUSD) of the exchange.

Gemini is embroiled in a legal dispute with Digital Currency Group’s crypto lender, Genesis Global Capital, which declared bankruptcy in January with $700 million in Gemini customers’ funds.