New York’s lawmakers are striving to create environment where bitcoin-based startups can thrive inside a regulated, safe framework. A new regulated exchange aims to sit within that framework and bring bitcoin to American investors. Gemini will be a brand new, fully regulated exchange that aims to boost consumer confidence and give bitcoin a more credible reputation.
Regulation & Trust
Dubbed the ‘Nasdaq of Bitcoin’, Gemini aims to succeed where other exchanges have failed. It will be more sophisticated, they say, and will appeal to American investors who want a trustworthy place to play the markets.
The founders of Gemini are the Winklevoss brothers, a pair of familiar faces to tech enthusiasts and viewers of The Social Network. They are the twin brothers who sued Mark Zuckerberg to the tune of $65 million, after claiming he stole their idea for a social networking website. The twins later invested in bitcoin companies and startups and have a reputation for backing bitcoin ventures. The name of the exchange is inspired by their twin relationship, and their backing could give Gemini the traction it needs to get it in front of the American public.
The Winklevoss twins certainly know their bitcoin history; they claimed to own almost 1 per cent of all mined bitcoins in 2013, having started to purchase them only a year before. They will undoubtedly be aware of the catastrophes that have gone before them, such as Mt Gox’ well-publicised demise. They will also be aware that bitcoin’s value is ebbing lower and lower by the day, despite the fact that they have never sold a single bitcoin so far – and are said to have invested millions, regardless of the currency’s volatility.
Gemini will run from the family’s offices in Manhattan, and the company has aligned itself with regulatory experts for the start, giving it its best chance of being approved. It’s unique selling point is its foundation on American soil, and New York is notably interested in creating a workable framework for cryptocurrency providers. Depositors’ monies “will never leave the US”, according to the twins, which means investors will benefit from protections and insurances that overseas deposits cannot match.
It’s worth noting that the exchange won’t be decentralised, which is a clear statement of intent. Many bitcoin users feel that centralised exchanges go against the spirit of the currency, and centralisation also leads to a greater risk of hacking. Other centralised exchanges have suffered massive losses when malicious users have located flaws in the code, so the pressure is on Gemini’s developers to make sure the system is completely watertight. In a statement, the brothers say that security is their prime focus, and they have the funds and contacts to assemble a team that knows how to retain that focus long term.
Images courtesy of Shutterstock & Gemini.com