Crypto exchange Gemini reportedly plans to launch a crypto derivatives platform
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Gemini, one of the leading cryptocurrency exchanges owned by the Winklevoss twins, is currently assessing the possibility of launching a global crypto derivatives platform. The development comes amid prior reports that Coinbase, the largest exchange in the US, was looking to launch a similar product.
Gemini explores the launch of a global crypto derivatives trading platform
The new crypto derivatives platform launched by Gemini will offer trading for perpetual futures. The financial regulatory framework in the US bans offering such products to retail investors because of their risky nature.
If Gemini launches this product, the offering will be available in other jurisdictions. The product allows traders to access a product that does not have an expiration date and one that offers the possibility of high leverage.
The report comes amid earlier reports that Coinbase, another leading cryptocurrency exchange, was exploring launching a similar product. Cryptocurrency exchanges have been looking to expand their operations beyond the US because of the strict regulatory framework.
The US Securities and Exchange Commission (SEC) has been strictly enforcing regulations in the cryptocurrency industry. The strict regulatory framework came after the collapse of FTX and the failure of several crypto firms last year.
The Commodities Futures Trading Commission is also turning its attention to crypto regulations, and it recently sued Binance for violating US derivatives regulations. The SEC sued Kraken over its staking services and recently issued a Wells notice to Coinbase.
Gemini is joining the list of cryptocurrency exchanges focusing beyond the US market. The exchange is reportedly contacting trading platforms globally looking for a market maker to support the exchange’s trade executions outside the United States.
Gemini under pressure
As mentioned, the SEC has aggressively enforced crypto regulations, and Gemini is among the targeted exchanges. In January, the SEC charged Gemini and Genesis Global Capital for offering unregistered crypto lending products through Gemini Earn. In the lawsuit, the SEC said that Gemini Earn was an unregistered security.
The Gemini Earn product was affected after Genesis halted withdrawals late last year. Gemini and its co-founders are facing a class-action lawsuit filed by several investors in Gemini Earn who have accused the exchange of multiple fraudulent activities. The class-action lawsuit claims that Gemini violated the Exchange Act and misled investors.
Shortly after the lawsuit was filed, Genesis filed for bankruptcy protection. FTX’s bankruptcy triggered the collapse of Genesis as the platform had funds at FTX before the bankruptcy filing.
Gemini was not immune to negative events that rocked the cryptocurrency sector in 2022. Since June last year, the exchange has announced three rounds of job layoffs. The first round of job cuts happened in June when the exchange laid off 10% of its employees.
Gemini laid off another 7% of its employees in July last year. The recent round of layoffs happened in June when the exchange laid off 10% of its staff. Multiple crypto firms laid off employees in 2022 amid bearish conditions.