The Philippines Securities and Exchange Commission warned the public last week not to use New York-based crypto exchange Gemini Trust Co.’s derivatives platform, which the country considers to engage in the unauthorized offering of securities.

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Fast facts

  • The Philippines regulator stated that Gemini “operates without the necessary license and/or authority to solicit, accept or take investments/placements from the public nor to issue securities.” It further advised the public to stop investing with Gemini.
  • The criminal law of the Philippines punishes the operation of unregistered investment platforms with a jail sentence of up to 21 years or a fine of five million Philippine pesos (US$89,810), according to the statement.
  • “This is part of the Commission’s efforts to secure the investment landscape,” Philippines SEC Commissioner Kelvin Lester Lee told Forkast in a LinkedIn message on Tuesday. “Investor protection is one of our primary mandates. We do not want unregistered and unlicensed entities to operate in the Philippines.”
  • Gemini launched its non-US derivatives trading platform across 30 countries including the Philippines on May 2. The company has not immediately responded to Forkast’s email request for comment.
  • Various Asian regulators have recently ramped up scrutiny of digital asset service providers to ensure safer trading environments for investors. 
  • On Monday, Malaysia’s market regulator asked crypto exchange Huobi Global to cease operations in the country on the grounds of offering exchange services without local registration, it said. 
  • Hong Kong is also mandating a licensing regime for crypto firms starting June this year. This will, the Securities and Futures Commission says, set clear standards to help prevent money laundering and other illegitimate market practices.
  • Meanwhile, Gemini was sued by the U.S. Securities and Exchange Commission (SEC) in January for the unregistered offer and sale of securities to retail investors through its Gemini Earn crypto lending program.  
  • The SEC’s legal action against Gemini is part of a spate of lawsuits brought by the U.S. regulator against companies providing crypto related services in the country.
  • In its statement on Gemini, the Philippines securities regulator quoted comments made in January by Gary Gensler, the chairman of its U.S. counterpart. It said that “crypto lending platforms and other intermediaries need to comply with our time-tested securities laws. Doing so best protects investors. It promotes trust in markets.”
  • The story has been updated with comments from Lee.

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