Philippine Securities and Exchange Commission warns investors that Gemini is operating a newly launched derivatives exchange without regulatory approval in the country, Bloomberg News report May 22nd.
The watchdog issued an official warning to the exchange on May 18, according to the report.
Violation of the country’s securities regulations carries a penalty of 21 years in prison or a fine of about $90,000 if convicted.
In May, Gemini launched its non-U.S. derivatives platform, the Gemini Foundation, with the Philippines listed as one of them. Supported region. However, the country’s regulators have argued that the exchange has no legal right to operate in the country as it has not obtained product approval.
The SEC added that Gemini sells derivative products in the Philippines that are considered securities in nature and has not obtained regulatory approval for the sale of securities.
According to the Philippine Securities and Exchange Commission:
“Because Gemini Trust Company LLC has not pre-registered with the Commission, the activity of offering and/or selling securities in the form of derivatives violates the provisions of the SRC and is unlawful.”
Regulators have advised the public that the Gemini Foundation “does not have the necessary licenses or authority to solicit, accept or accept any investment or placement from the public or to issue any securities and will therefore suspend such transactions until further notice.” He recommended to the public to avoid investing in ”
The Gemini Foundation was created to sidestep regulatory uncertainties and hurdles to the U.S. cryptocurrency industry. But the Philippines’ actions show that global expansion comes with its own set of challenges for an emerging industry.
New York-based Gemini Trust has been under regulatory pressure in the United States, and the launch of its non-US derivatives platform was a way to continue operating regardless of the US regulatory situation.
Regulation in the country remains opaque, and regulators are reluctant to develop new rules for the industry. The SEC has argued in court that existing securities laws already cover most of the cryptocurrency sector and that no new rules are needed.
However, many cryptocurrency companies have disagreed with this and have been embroiled in legal battles with the SEC over various anti-crypto positions.
As a result, there is a growing feeling in the cryptocurrency industry that the United States is not the right place to launch a business or project.
Many companies have already started to leave the United States and are in the process of establishing non-U.S. companies to continue their operations globally.
Some countries, such as the UAE and Portugal, have embraced the cryptocurrency industry with open arms and are using it as an opportunity to establish themselves as a hub.