Gemini, the cryptocurrency exchange founded and operated by the Winklevoss twins, has announced the launch of a non-US crypto derivatives platform dubbed Gemini Foundation. In response to regulatory pressure in the United States, another platform has decided to move its derivatives branch outside the country's borders.
Gemini to Launch Gemini Foundation Crypto Derivative Platform
The first products offered by Gemini Foundation will be based on Gemini dollars (GUSD), the exchange's proprietary stablecoin, and will be used for settling Bitcoin (BTC) perpetual contracts. Similar contracts based on Ethereum (ETH) are expected to be introduced in the near future.
The new platform will allow investors to gain short and long exposure to crypto assets by trading on spot and derivative markets. According to a press release posted on the exchange's website, users from the United States will not be able to use its services. The list of approved traders includes those from Asia, South America, Australia, the Middle East, and several European countries.
"Singapore, Hong Kong, India, Argentina, Bahamas, Bermuda, British Virgin Islands (BVI), Bhutan, Brazil, Cayman Islands, Chile, Egypt, El Salvador, Guernsey, Israel, Jersey, New Zealand, Nigeria, Panama, Peru, Philippines, Saint Lucia, Saint Vincent & Grenadine, South Africa, South Korea, Switzerland, Thailand, Turkey, Uruguay, and Vietnam," Gemini Foundation listed.
The platform will offer trading with leverage up to 100:1, with the basic leverage level set at 20:1. Users will be able to execute transactions in USD, USDC, and GUSD. However, if they convert their funds into Gemini's stablecoin, they will not incur any additional transaction costs.
"Gemini Foundation will continue to expand its derivatives offering in the coming months. We're just getting started, so stay tuned," the blog post concluded.
1/ Gemini Foundation's BTC perpetual contract is now available for early, limited access to select customers! More availability soon.
— Gemini (@Gemini) April 24, 2023
Visit https://t.co/UX9D7DCXfN to sign up for priority access and to be notified when Gemini Foundation is available for you. pic.twitter.com/GnfOludtUs
Regulators' Pressure on Crypto in the US Grows
The information emerges almost a month after Finance Magnates reported that Gemini was exploring the possibility of launching an international derivatives trading platform. This move is driven by the ban on retail traders trading such instruments in the United States and the increasing regulatory pressure from the Securities and Exchange Commission (SEC ) and the Commodity Futures Trading Commission (CFTC).
According to Bloomberg, Coinbase is considering a similar move, examining the potential of opening up to jurisdictions outside the United States. The San Francisco-based platform has been operating in the market for 11 years and is one of the oldest in the industry, and the only cryptocurrency exchange in the world to have its listing on Wall Street. However, recent attempts to tighten regulations have also prompted the exchange to consider relocating.
The series of regulatory actions by the SEC and CFTC are a consequence of the collapse of the FTX exchange in November of last year. For example, in February, the cryptocurrency exchange Kraken closed its staking-as-a-service and paid a $30 million settlement to the SEC, and a month later announced its intention to transform from an exchange into a cryptocurrency bank to resolve regulatory disputes. In a separate case, the CFTC sued Binance a month ago for operating an illegal derivatives exchange in the country.
Gemini is a crypto company founded in 2015 by Cameron and Tyler Winklevoss, billionaire twins who were Olympic rowers in the past and now run many businesses, including a cryptocurrency exchange. Although they began their entrepreneurial journey at the age of 13 by building websites, the Facebook settlement provided them with a significant cash injection, as they received $65 million from Mark Zuckerberg. They claimed that he had stolen their idea and part of the code they had paid him to write.
