• Gemini, the brainchild of the Winklevoss twins, is planning to launch an overseas derivatives exchange offering perpetual futures.
• The company has been reaching out to trading firms to serve as market makers for this offering.
• However, the product is highly risky and could draw scrutiny from regulators.
Gemini Planning To Launch Overseas Derivatives Exchange
The Gemini crypto exchange, founded by the Winklevoss twins, is working on launching an international crypto derivatives exchange in order to fill the gap left by FTX’s collapse. The platform will be a riskier one – offering perpetual futures with no expiry date.
Perpetual Futures Riskier Than Usual
Perpetual futures are considered more risky than usual because they allow traders to use high levels of leverage without an expiry date. This type of derivative product is banned for retail trading in the United States and could draw scrutiny from regulators when offered by Gemini.
Gemini In Hot Water With SEC
The Securities and Exchange Commission (SEC) may not be too happy about Gemini’s plans as they have already gotten into hot water with them in January 2023 due to alleged unregistered securities sales. Furthermore, other regulatory bodies like the Commodity Futures Trading Commission (CFTC) have recently sued Binance on charges of violating U.S. derivatives law which could further complicate matters for Gemini if their offerings run afoul of regulations as well.
Coinbase Also Looking At Overseas Market
Coinbase has also indicated plans to venture into the overseas market with its own offering of perpetual futures derivatives but it might face enforcement action from the SEC which could give Gemini a chance at being first-to-market in this space instead.
Conclusion
Gemini’s plan to enter into overseas derivatives trading could prove fruitful if successful but it will need to navigate around potential regulatory issues that come with such a risky product before it can do so properly.