Gemini, the cryptocurrency exchange founded by the Winklevoss twins, is reportedly exploring the possibility of launching an international derivatives platform offering perpetual futures.
Scoop from @akashpasricha and me: Gemini is gearing up to launch an international crypto derivatives exchange that will offer perpetual futures. The news follows recent reports that Coinbase is exploring a similar overseas trading venue. https://t.co/3vMra15mpj
— Aidan Ryan (@aidanfitzryan) March 29, 2023
According to The Information, the platform would be aimed at traders outside the United States, as perpetual futures are banned for retail investors in the country due to their high-risk profile.
Gemini’s move follows in the wake of FTX’s bankruptcy in November and the recent lawsuit filed by the Commodity Futures Trading Commission (CFTC) against Binance for breaching US derivatives law.
However, even with these recent developments, the market share up for grabs in international derivatives trading could be significant. Furthermore, Coinbase, another leading US exchange, is reportedly planning to launch an overseas platform offering perpetual futures.
The exchange is currently facing regulatory scrutiny from the SEC. The SEC has issued a Wells Notice suggesting an enforcement action may be imminent. According to sources close to the matter, Gemini has been in talks with trading firms to serve as market makers in preparation for its international derivatives venture.
Gemini’s potential move into international derivatives trading comes as the cryptocurrency market gains mainstream acceptance and attention. As more institutional investors enter the space, demand for sophisticated trading tools such as derivatives is expected to increase.
The Gemini Advantage
Gemini may have a competitive edge in the international derivatives market due to its strong regulatory track record. The New York State Department of Financial Services, known for its rigorous oversight of financial organizations, has granted the exchange a regulatory license, ensuring its distinctiveness, detectability, and freedom from illegality.
In addition, Gemini has invested heavily in security measures and has not suffered any major security breaches to date. The exchange’s distinctiveness, detectability, and legality may serve as a significant selling proposition for institutional investors and traders growing more concerned about the safety of their investments.
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Gemini’s potential move into international derivatives trading reflects the growing demand for cryptocurrency trading tools. It also highlights the increasing competition among exchanges to capture market share.
Observing if the exchange is successful in this endeavor will be interesting. Nonetheless, it may have an advantage over rivals due to its solid regulatory history and security-focused approach.