Gemini, one of the leading cryptocurrency exchanges, is seeking new opportunities outside of the U.S. as the country’s crypto regulation has made derivatives expansion difficult.
Key Details
- Cameron and Tyler Winklevoss, known as the Winklevoss twins, formed Gemini Trust Company in New York in October 2015, and now they are launching new platforms outside of the U.S.
- The twins tell Fortune that the regulatory environment is too hostile to continue growing their crypto business. They have formed new derivatives platforms in 30 countries and launched the Gemini Foundation in Singapore.
- The company applied to the Commodity Futures Trading Commission in 2020 to create a U.S. derivatives exchange and pulled the application earlier this year after it became clear that the process had bogged down and was going to take longer to happen.
- The twins have yet to totally decide against attempting to launch a derivatives branch in the U.S. in the future but are focusing overseas for the moment.
Why It’s News
As we previously reported, crypto regulation has been hotly debated in the past year, as the world of crypto has faced numerous bear markets, exchange collapses, and liquidity crises. Both crypto proponents and those hostile to decentralized currency have advocated that the federal government take more stringent measures to fix regulations. However, there remain disagreements about whether the government should crack down on the market or invest in it.
The Problem
The Winklevoss twins met this problem head-on with their attempts to dive into the derivatives market. Derivatives trading is highly regulated within the U.S., and other exchanges like Binance have gone as far as to bar the practice from U.S. arms of their company to avoid the problems of having to navigate financial rules. This is a problem for Tyler Winklevoss, who argues that derivatives offer important risk assessment benefits to marketplaces. For now, they’ve limited these services outside of the U.S., U.K., and E.U.
Backing Up A Bit
Gemini has faced renewed hostility from the U.S. government over the past year, facing a June 2022 lawsuit alleging that the exchange made misleading statements in its Bitcoin futures launch attempt. The SEC charged the exchange in January with unregistered securities sales.
Notable Quote
“If we can’t do it in the U.S. right now—dramatically grow our business and bring crypto to folks here—that’s not going to stop us from bringing it globally,” Tyler told Fortune. “We’re not leaning out of the U.S. We’re just leaning into being a global company. If lawmakers could come together and build a clear framework for crypto companies, it would be a huge boon for the U.S., and a huge boon for consumers, innovators, and investors.”
