Gemini launches derivatives platform outside the US
On April 21, US-based crypto exchange Gemini announced the upcoming launch of a derivatives platform outside the US. The move comes amid a tighter and uncertain regulatory environment for crypto firms in the country.
Called Gemini Foundation, the offshore division will offer services to users based in Singapore, Hong Kong, India, Argentina, Bahamas, Bermuda, British Virgin Islands, Bhutan, Brazil, Cayman Islands, Chile, Egypt, El Salvador, Guernsey, Israel, Jersey , New Zealand, Nigeria, Panama, Peru, Philippines, Saint Lucia, Saint Vincent and the Grenadines, South Africa, South Korea, Switzerland, Thailand, Turkey, Uruguay and Vietnam. It will not offer services for customers in the United States.
The platform’s first derivative contract will be a Bitcoin (BTC) perpetual contract denominated in Gemini dollars (GUSD), followed by an ETH/GUSD perpetual contract shortly thereafter.
Eligible customers will be able to trade both spot and derivative products, as well as convert USD and USD Coin (USDC) to GUSD on a 1:1 basis. Fees, profits and losses will also be processed in GUSD. Default leverage is set at 20x, with a maximum possible leverage of 100x.
Unlike traditional futures contracts, perpetual contracts never expire. Perpetual futures trading is not regulated by the Commodity Futures Trading Commission (CFTC). Exchanges that offer crypto futures contracts, such as BitMEX, are not available to US customers.
Related: What Are Cryptocurrency Perpetual Futures Contracts?
The move comes days after Gemini revealed plans to establish a new engineering center in India. The exchange’s founders Tyler and Cameron Winklevoss recently announced “big plans for international growth this year in APAC.” Earlier this month, Gemini filed a pre-registration with the Ontario Securities Commission to become a limited dealer in Canada.
Gemini has been investigated by US authorities. The New York State Department of Financial Services is reportedly investigating the exchange over allegations that many users believed assets in their Earn accounts were protected by the Federal Deposit Insurance Corporation.
Gemini’s Earn program halted withdrawals in November, after its operating partner, Genesis, cited “unprecedented market turmoil.” In January, the firm filed for Chapter 11 bankruptcy. Reports at the time suggested that up to $900 million in Earn user funds could have been locked up. The US Securities and Exchange Commission also accused the exchange of offering unregistered securities through Earn in January.
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