Gemini launches non-US crypto exchange
Gemini, the cryptocurrency exchange founded by the Winklevoss twins, has launched an international derivative trading platform in response to a US domestic crackdown on crypto assets.
Dubbed ‘Gemini Foundation,’ the non-US derivatives exchange will allow its customers to trade spot and derivative products with somewhat risky nature. A Bitcoin perpetual contract denominated in Gemini’s stablecoin — GUSD has already been introduced as its first derivative contract, and will be shortly followed by a perpetual ether (ETH) contract.
A perpetual contract is a type of futures contract that does not have an expiry date. Instead, it is designed to be held indefinitely, as long as both parties meet their margin requirements. Perpetual contracts are commonly used in cryptocurrency trading and are similar to traditional futures contracts, but without an expiration date.
According to an announcement, “Gemini Foundation will allow eligible customers to leverage their crypto assets to achieve long or short crypto exposure in order to manage risk, generate returns, and gain directional exposure. Eligible customers will be able to trade both spot and derivatives products and execute all of their trading strategies within a secure and trusted platform.”
Gemini’s offshore exchange is not onboarding any users from the United States as the new division will be accessible only to traders in the following 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.
Rival exchange Coinbase is also planning to launch a new platform overseas as part of an aggressive expansion outside the United States. However, the nature of Coinbase’s overseas operations, or where it would be located, remains unclear.
The US exchanges’ expansion comes at a tumultuous time as US regulators set their sights on the industry due to the recent catastrophic incidents, including downfall of FTX. Furthermore, US crypto-friendly banks, such as Silvergate and Signature Bank, fell into bankruptcy after running into financial troubles.
Gemini is being sued by investors over the sale of its interest-bearing crypto products. The complaint alleges that Gemini’s Earn program didn’t register its high-yield products as securities in accordance with U.S. securities law.
Nevertheless, Gemini reached an agreement with bankrupt crypto lender Genesis and its parent company Digital Currency Group that includes a viable restructuring plan. The agreement will see Barry Silbert-owned DCG exchange its outstanding $1.1 billion note due in 2023 for convertible preferred stock.
