Gemini, the cryptocurrency exchange founded by the Winklevoss brothers, is undeterred by regulatory hurdles. As U.S. regulators step up scrutiny of cryptocurrency exchanges, Gemini announces the launch of perpetual futures contracts for international clients. This decision comes in a context in which the company is under investigation by the SEC.
Gemini and the challenges of the derivatives market
The derivatives market is recognized for its complexity and high level of risk. Despite these challenges, Gemini decided to go for it by offering perpetual futures contracts. These are considered high-risk products, to the point of being prohibited for retail traders in the United States.
This is why the US Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Binance for violating the country’s derivatives laws.
Gemini is also facing charges from the United States Securities and Exchange Commission for the unregistered offering and selling of securities of crypto assets.
Despite these challenges, many cryptocurrency exchanges, including Coinbase, are looking to expand internationally by offering derivatives.
Exchanges are aware of the risks. However, they also consider that experienced traders like derivatives.
The coming regulatory crackdown
Cryptocurrency exchanges have faced increased scrutiny from regulators since the collapse of FTX.
US authorities are investigating a number of cryptocurrency exchanges, including Gemini, to see if they are compliant with applicable laws and regulations.
This regulatory crackdown could lead to significant changes in the cryptocurrency landscape by 2023.
For now, Gemini is focused on launching its derivatives platform according to The information. However, this initiative comes with its own set of regulatory challenges. Each country has its own cryptocurrency laws and regulations.
In this sense, recent events could cause exchanges to rethink their strategies as regulators get tougher on the cryptocurrency market and companies active in this sector.
The cryptocurrency industry continues to face significant regulatory challenges. Nevertheless, exchanges seem determined to meet the needs of their international clientele. It remains to be seen how regulators will continue to monitor the market and how companies will adapt. In the meantime, Bitcoin continues its journey by outperforming over 97% of major publicly traded companies in the United States.
Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of daily and weekly so you don’t miss any of the essential Tremplin.io!
