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Late last week, the Philippine Securities and Exchange Commission issued a warning against investing in Gemini’s derivatives exchange. According to the post, Gemini Foundation failed to register with the watchdog and is breaking the country’s securities laws.
Gemini Accused of Breaking Securities Laws in the Philippines
The Philippine Securities and Exchange Commission recently posted a warning against investing in Gemini Foundation. According to the SEC, Gemini’s derivatives exchange is offering securities, as defined by the country’s laws, without previously registering with the watchdog.
The regulator highlighted that Gemini’s offering of securities in the form of derivatives is illegal and warned “all individuals and/or entities that strict penalties are imposed for violations of the Securities Regulation Code”, and other similar laws.
According to the Philippine SEC, the penalty for breaking said laws can be as high as 21 years in prison, or a fine equivalent to about $90,000 or both. The warning against Gemini Foundation comes less than three weeks after it was launched.
Gemini Under Continuous Pressure Since the Start of 2023
Gemini has been under significant pressure since the very beginning of 2023. Early January brought an ongoing dispute between the company and the Digital Currency Group to light—a dispute that appears to still be ongoing based on Monday reports that the latter missed a $630 million debt payment.
Additionally, in mid-January, the Winklevoss twins’ company became a target of the US Securities and Exchange Commission complaint which alleged that it offered unregistered securities through Gemini Earn. Around the same time, the firm also announced it is shutting down its Earn product.
On April 10th, it was also reported that, as a result of the pressure, Gemini was forced to borrow $100 million directly from the Winklevoss twins’ personal fortune. Despite the setbacks, the firm has also continued expanding not only launching its international derivatives exchange but also taking the first steps to comply with Canada’s new rules for cryptocurrency companies.
Will the Philippine SEC start an enforcement action against Gemini? Tell us what you think in the comments below.