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The Commission has received information that GEMINI TRUST COMPANY,
LLC, through its website GEMINI.COM has launched its product GEMINI
DERIVATIVES and is openly offering this product that involves offering of derivatives
which is a form of “securities”.
“Securities” as defined under Section 3 of the Securities Regulation Code
(SRC), are shares, participation or interests in a corporation or in a commercial
enterprise or profit-making venture and evidenced by a certificate, contract,
instruments, whether written or electronic. It Includes:
“xxx.
(d) Derivatives like options and warrants;
xxx”
In the Philippines, it is prohibited to sell and/or offer for sale, or distribute
securities without prior registration with the Securities and Exchange Commission.
Section 8.1 of the Securities Regulation Code specifically states that, “securities
shall not be sold or offered for sale or distribution within the Philippines, without a
registration statement duly filed with and approved by the Commission. Prior to such
sale, information on the securities, in such form and with such substance as the
Commission may prescribe, shall be made available to each prospective purchaser.”
Furthermore, according to Section 28.1 of the Securities Regulation Code, no
person shall engage in the business of buying or selling securities in the Philippine as
a broker or dealer, or act as a salesman, or an associated person of any broker or
dealer unless registered as such with the Commission.
On the other hand, Rule 3.1.17 of the 2015 Implementing Rules and
Regulations of the Securities and Regulation Code defined public offering as
follows:
Public offering is any offering of securities to the public or to anyone, whether
solicited or unsolicited. Any solicitation or presentation of securities for sale through
any of the following modes shall be presumed to be a public offering:
xxx
3.1.17.3. Advertisement or announcement on radio, television,
telephone, electronic communications, information communication
technology or any other forms of communication; or
3.1.17.4. Distribution and/or making available flyers, brochures or any
offering material in a public or commercial place or to prospective
purchasers through the postal system, information communication
technology and other means of information distribution.
Lastly, the 2015 SRC Rules also define “dealing in securities” and “solicitation,”
as follows:
Dealing in securities includes making or offering to make with any
person, or inducing or attempting to induce any person to enter into or
to offer to enter into any agreement for or with a view to acquiring,
disposing of or subscribing to securities.
Solicitation is the act of seeking or asking for business or information
which includes the act of providing information about a security or
investment product being offered for sale with the view of making
another person a client or closing or bringing a sale or purchase of
security or investment product. The solicitor need not be a signatory
to any contract relative to such offer or sale of security.
Therefore, GEMINI TRUST COMPANY, LLC. must be duly registered with the
Commission and that any person or entity intending to offer and/or sell its securities
are required to secure the necessary registration and/or license from the Commission
as well.
However, per record, GEMINI TRUST COMPANY, LLC. is NOT
REGISTERED with the Commission and OPERATES WITHOUT THE NECESSARY
LICENSE AND/OR AUTHORITY to solicit, accept or take investments/placements
from the public nor to issue securities defined under Section 3 of the Securities
Regulation Code (SRC).
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.
Hence, the public is advised NOT TO INVEST or STOP INVESTING in any
investment-taking scheme offered by GEMINI TRUST COMPANY, LLC or such other
entities engaged in investment-taking schemes without the necessary licenses and/or
authority.
Accordingly, the Commission warns all individuals and/or entities that strict
penalties are imposed for violations of the Securities Regulation Code, the
Revised Corporation Code, and such other rules and regulations enforced by
the Commission.
Those who act as salesmen, brokers, dealers or agents of entities without
authority to offer and/or sell securities like GEMINI.COM/ GEMINI TRUST COMPANY,
LLC in selling or convincing people to invest in their investment scheme including
solicitations and recruitment through the internet may likewise be criminally
prosecuted and penalized with a maximum fine of Five Million pesos (P5,000,000.00)
or a penalty of Twenty-one (21) years of imprisonment or both pursuant to Sections
28 and 73 of the SRC.
The Securities and Exchange Commission of the United States of America (US
SEC) has also filed a complaint against Gemini earlier this year, January 12, 2023.
The complaint against Gemini alleges that the entity’s Gemini Earn program
constitutes an offer and sale of securities which requires prior registration with the
Commission.
It is also noteworthy to quote the US SEC Chairman Gary Gensler’s sentiments
on the complaint saying, “Today’s charges build on previous actions to make clear to
the marketplace and the investing public that crypto lending platforms and other
intermediaries need to comply with our time-tested securities laws. Doing so best
protect investors. It promotes trust in markets. It’s not optional. It’s the law.”1
Likewise, in 2022, Gemini was sued by the US Commodity Futures Trading
Commission for allegedly deceiving regulators by providing false information about the
exchange and futures contracts during meetings with the regulators as part of an
attempt to secure approval for Bitcoin futures in 2017.
Should you have any information on any investment solicitation activity by any
individual or group of individuals representing GEMINI TRUST COMPANY, LLC or its
website GEMINI.COM, please send your report to the EIPD at epd@sec.gov.ph.
For the information and the guidance of the public.
Makati City, May 11, 2023.