Gemini Trust Company, LLC, the much anticipated bitcoin exchange founded by the Winklevoss brothers, has finally received approval from the New York State Department of Financial Services (NYDFS) to operate as a financial services firm.
Gemini, which has been granted a license to operate as a chartered limited liability trust company last week, will officially open for trading on Thursday, October 8, and will serve both individuals and institutional customers.
“Our position from day one was to ask for permission, not forgiveness. We worked very hard over the past year to obtain a limited liability trust company charter by meeting the high-water mark of banking compliance,” Cameron Winklevoss, President of Gemini, said in a statement. “Similar to other premier financial institutions Gemini is safe and compliant.”
According to Gemini’s CEO Tyler Winklevoss, the company decided not to apply for a BitLicense as it wanted to build “an exchange that both the Main Street and Wall Street could use and trust.”
“Even though this path was more costly and time-consuming, it was necessary to fulfill our goal of serving institutional customers,” Tyler Winklevoss said.
“Gemini must look and feel as safe, secure and compliant as any other top tier financial institution in the world,” the company said in a blog announcement.
“This includes, among other things, creating a robust anti-money laundering (AML) program, strong internal controls and procedures, a comprehensive security program and maintaining significant capital reserves.”
Gemini, which will enable users to buy, sell and hold bitcoins, will first start operating in 27 US states. The company plans to expand its coverage area rapidly to include “additional US states, Europe, Asia and other jurisdictions,” Tyler Winklevoss said.
The majority of bitcoin deposits will be held in cold storage, while fiat deposits will be held with New York-based commercial bank Signature Bank, the company said.
Gemini is the second bitcoin-related product of Winklevoss Capital. The exchange follows the Winkdex bitcoin index, which was launched in February 2014. The company is still awaiting regulatory approval from the US Securities and Exchange Commission for a bitcoin ETF proposed in 2013.
The exchange is the second bitcoin company to be granted a license to operate as a chartered limited liability trust company by the NYDFS. Digital currency exchange ItBit was granted the first charter in May 2015.
“In New York, we are continuing to move forward on licensing and chartering virtual currency firms,” Anthony J. Albanese, Acting Superintendent of Financial Services, said in a release.
“Smart, targeted regulation that helps protect consumers and prevent illicit activity is vital to the long-term future of this industry.”
To date, three bitcoin firms have received charters or licenses from the NYDFS.
In September 2015, the NYDFS granted the first BitLicense application to digital currency firm, Circle Internet Financial.
The NYDFS said it had received 25 BitLicense applications so far.
Image credit: Winklevoss brothers, Winklevosscapital.com.