Gemini, a leading cryptocurrency exchange based in the United States, has revealed its plans to launch a derivatives platform outside the country.
1/ Introducing Gemini Foundation – a non-US crypto derivatives platform.
Coming soon…https://t.co/HtFHHfAP8d
— Gemini (@Gemini) April 21, 2023
This decision comes as the regulatory environment for crypto companies in the U.S. is becoming increasingly uncertain and restrictive.
Dubbed Gemini Foundation, the offshore division will offer services to users based in various countries including:
- Egypt
- Nigeria
- South Africa
- Singapore
- Hong Kong
- India
- Argentina
- Bahamas
- Bermuda
- the British Virgin Islands
- Bhutan
- Brazil
- the Cayman Islands
- Chile
- El Salvador
- Guernsey
- Israel
- Jersey
- New Zealand
- Panama
- Peru
- the Philippines
- Saint Lucia
- Saint Vincent and Grenadine
- South Korea
- Switzerland
- Thailand
- Turkey
- Uruguay
- Vietnam
The first derivative contract to be offered by the Gemini Foundation will be a perpetual contract for Bitcoin (BTC) denominated in Gemini Dollar (GUSD). This will be followed by the launch of an ETH/GUSD perpetual contract soon after.
Customers who are deemed eligible will have access to both spot and derivatives trading products on the Gemini Foundation platform. They will also be able to convert U.S. dollars and USD Coin (USDC) into Gemini Dollar (GUSD) at a 1:1 ratio, and all fees, profits, and losses will be processed in GUSD.
The default leverage offered on the platform will be 20x, with the maximum possible leverage being 100x.
Perpetual contracts, unlike traditional futures contracts, do not have an expiration date. However, they are not regulated by the U.S. Commodity Futures Trading Commission, and exchanges that offer cryptocurrency futures contracts, such as BitMEX, are not accessible to customers in the United States.
Gemini ranks as the 5th largest crypto exchange in the US, with a 4.1% market share by web traffic as of March 2023https://t.co/c7lF8zQjUv pic.twitter.com/b7aWZzgv9M
— BitKE (@BitcoinKE) April 24, 2023
Gemini’s decision to launch its derivatives platform outside of the United States follows its announcement of establishing an engineering hub in India a few days earlier. The founders of the exchange, Tyler and Cameron Winklevoss, have also stated that they have significant plans for international expansion in 2023.
Gemini has faced scrutiny from U.S. authorities, including an investigation by the New York State Department of Financial Services. The investigation is reportedly centered around claims that many users believed that assets held in their Earn accounts were protected by the Federal Deposit Insurance Corporation, which has raised concerns about the exchange’s compliance with regulatory requirements.
Gemini’s Earn program faced issues when withdrawals were halted in November 2022 after its operating partner, Genesis, cited ‘unprecedented market turmoil.’ The firm later filed for Chapter 11 bankruptcy in January 2023, which reportedly caused up to $900 million in Earn user funds to be locked.
Furthermore, in January 2023, the U.S. Securities and Exchange Commission charged Gemini with offering unregistered securities through its Earn program.
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