According to The Information, the Cameron and Tyler Winklevoss-founded cryptocurrency exchange Gemini plans to open a global cryptocurrency derivatives exchange.
The platform would offer perpetual futures in particular, a sort of derivative that is prohibited in the US for retail traders since it has no expiration date and may be traded using significant leverage, making it a very risky product.
The announcement comes after the FTX cryptocurrency exchange filed for bankruptcy in November and this week’s Commodities Futures Trading Commission (CFTC) lawsuit against Binance for, among other things, violating American derivatives legislation. A sizeable market share in the trading of foreign derivatives may become available as a result of FTX’s withdrawal and Binance’s regulatory problems. In addition to the Gemini intentions, a prominent U.S.-based exchange called Coinbase (COIN) was also reportedly aiming to build an international platform in order to provide perpetual futures, according to a report from earlier this month.
With a Wells Notice from the U.S. Securities and Exchange Commission (SEC) indicating an impending enforcement action, Coinbase has its own regulatory worries. According to persons familiar with the situation, Gemini has been reaching out to trading companies in recent months to act as market makers for an international business.
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