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Gemini prepares international crypto derivatives exchange to fill FTX void

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(Kitco News) - Gemini, the crypto exchange owned by Cameron and Tyler Winklevoss, is preparing to launch an international cryptocurrency derivatives exchange, according to a report from The Information.

The report cites two sources familiar with the matter who said that the exchange “has been approaching trading firms that act as market makers, providing liquidity to exchanges, for preliminary work on the new exchange in recent months.”

According to the report, Gemini’s efforts are focused on offering a form of crypto derivatives known as perpetual futures, which enable traders to take highly-leveraged positions. Perpetual futures are against U.S. regulations for retail traders, but Gemini could offer them to customers in other jurisdictions.

Gemini was founded in 2014, and is the 16th largest cryptocurrency exchange by trading volume with $29 million in daily transactions according to CoinMarketCap. The exchange is based in New York, and offers spot trading, staking and other crypto services in 70 countries and all 50 U.S. states.

The sources said that collapse of Sam Bankman-Fried’s FTX exchange in November created an opportunity for Gemini, as FTX was a major player in derivatives trading in international markets. The timeline for launch is not clear.

The San Francisco-based Kraken exchange already allows international customers to trade with up to 50x leverage, and Coinbase, also headquartered in San Francisco, is expanding their international business beyond the more than 100 countries they already serve while exploring the possibility of offering perpetual futures.

Gemini was embroiled in a bitter legal dispute with bankrupt crypto lender Genesis since the week of the FTX implosion, but the two sides came to an agreement in early February when Genesis announced an “agreement in principle” between parent company Digital Currency Group (DCG) and their creditors, including Gemini, on the more than $2 billion in money owed.

Gemini, which was one of Genesis’ largest creditors, also agreed to contribute up to $100 million in additional funds to customers who subscribed to their Earn program as part of the plan.

“This plan is a critical step forward towards a substantial recovery of assets for all Genesis creditors,” said Gemini cofounder Cameron Winklevoss in a twitter thread. “There is still much work to be done to complete this process, including further due diligence of Genesis financials and judicial approval of this plan, but we are confident that we now have a framework in place to execute on.”

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