The Philippines Securities and Exchange Commission (PSEC) has issued a warning on its website advising the public against investing in Gemini’s Gemini Derivatives product. The product, which is available on the Gemini Foundation platform, was launched in certain jurisdictions on May 1.
According to Philippine law, derivatives are considered securities that must be registered with the PSEC. However, Gemini lacks the licensing and authority necessary to operate in the country. The PSEC stated that individuals or entities involved in the sale or promotion of unregistered securities could face fines of up to 5 million pesos ($89,826) or imprisonment for up to 21 years. This statement was released on May 11 but was posted online a week later.
The PSEC’s warning references complaints filed by the United States Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission against Gemini. It also quotes the SEC Chair Gary Gensler regarding Gemini’s Earn program, which the SEC filed a complaint in January. Gensler emphasized the importance of crypto lending platforms and intermediaries complying with existing securities laws, stating that it is a legal requirement, not an option.
The Gemini Foundation platform was launched in 29 countries, including the Philippines, as announced on May 1. However, it is not available in the United States, United Kingdom, or European Union. The platform offers a Bitcoin perpetual contract denominated in the exchange’s native currency, Gemini Dollar (GUSD).
Gemini is currently engaged in a legal dispute with Genesis Global Capital, a crypto lender owned by Digital Currency Group. Genesis Global Capital filed for bankruptcy in January, resulting in approximately $700 million worth of Gemini customers’ funds being locked up.