Gemini’s derivative exchange plan adds Crypto’s flight from the US
(Bloomberg) — U.S. crypto companies are purposefully pursuing international expansion amid deepening regulatory efforts at home.
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The latest moves came from billionaire twins Tyler and Cameron Winklevoss’ Gemini Trust Co. The exchange last week unveiled plans to target growth in Asia and establish a non-US crypto derivatives platform.
The company’s announcements came not long after Coinbase Global Inc., the largest U.S. crypto exchange, said it had obtained a virtual asset license in Bermuda. Some reports say that Coinbase will set up a derivatives platform there.
Coinbase CEO Brian Armstrong recently said the exchange may consider moving its headquarters outside the US amid an industry meltdown in the world’s largest economy following the collapse of rival FTX.
The Securities and Exchange Commission has rattled the US digital asset sector with a flurry of enforcement actions this year, as US politicians struggle to develop crypto legislation. In contrast, the EU continues an effort to create rules for the industry, and places like Hong Kong and Dubai are seeking to promote crypto hubs.
“Given the progress made by regulators in Asia Pacific and the Middle East towards clarifying their regimes, it seems likely that virtual asset service providers will continue to gravitate towards jurisdictions that provide greater clarity and specific guidance,” said Vince Turcotte, director of digital -assets of market monitoring firm Eventus in Hong Kong.
Gemini last week named its Global Chief Technical Officer Pravjit Tiwana as Asia-Pacific CEO. The company will establish an engineering center in India and expand a team in Singapore.
Gemini’s planned derivatives exchange will be available across 30 territories, but not the US, according to a blog post. It will initially offer Bitcoin and Ether perpetual contracts denominated in Gemini dollars or GUSD, a stablecoin.
SEC Flurry
Coinbase said in an April 19 blog post that, aside from Bermuda, plans for the United Arab Emirates are accelerating amid discussions with Abu Dhabi officials about a potential license for a regulated exchange.
Gemini, Coinbase, Genesis Global Capital, Kraken and Bittrex Inc. are among the companies that have been targeted by tightening SEC oversight. Bittrex is shutting down its US operations, citing the regulatory environment.
Meanwhile, the Commodity Futures Trading Commission is suing Binance Holdings Ltd., the world’s largest crypto exchange, and its CEO Changpeng Zhao for violating U.S. derivatives rules. Binance has said it was disappointed by the case and would continue to cooperate with the regulator.
FTX’s giant bankruptcy and a litany of other wipeouts following last year’s crypto rout have created skepticism about digital assets in the US. SEC Chairman Gary Gensler claims that most digital tokens are unregistered securities and that the sector “has built itself around non-compliance.”
(Updates from first paragraph with context about crypto in the US.)
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