Key Points:
- Philippine regulators say cryptocurrency exchange Gemini has been operating without approval.
- The agency advises the public to refrain from investing and stops all current investments in the platform.
- Penalties for violating these regulations include criminal prosecution and up to 21 years in prison or a fine of 5 million Philippine pesos ($89,562).
The Philippine Securities and Exchange Commission has issued a warning to investors that Gemini is operating a newly launched derivatives exchange without regulatory permission in the country, Bloomberg News reports.
The Philippine Securities and Exchange Commission officially issued a warning to investors on May 18 that the Gemini Foundation, a derivatives exchange run by cryptocurrency trading platform Gemini Trust Co. launched last month, is operating illegally in the country.
The regulator said that Gemini Trust Co., Ltd. was not registered in advance, so the issue and/or sale of securities as derivatives violated relevant regulations and were illegal.
Penalties for violating these regulations include criminal prosecution and up to 21 years in prison or a fine of 5 million Philippine pesos ($89,562). The agency advises the public to refrain from investing and stops all current investments in the platform.
Gemini launched its non-U.S. derivatives platform Gemini Foundation in May, with the Philippines listed as a supported region. The exchange offers Bitcoin and ethereum perpetual futures contracts denominated in the exchange’s stablecoin GUSD.
However, the country’s regulators claim the exchange has no legal right to operate in the country as it is not approved for its products.
The SEC added that the cryptocurrency exchange marketed derivative products, which are essentially securities in the Philippines and are not approved by regulation to sell securities.
“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.” According to the Philippines SEC.
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