Gemini has recently launched the Gemini Foundation, an offshore crypto derivatives platform that was eagerly awaited by many. This new exchange is available for use in 30 countries, excluding the United States, the United Kingdom, and the European Union. The question then arises; why is this groundbreaking platform unavailable for such significant markets?
The inception of the offshore crypto derivatives trading platform took place just a few weeks after its announcement in April, allowing users to trade Bitcoin perpetual contracts denominated in Gemini Dollars, offering a 100x leverage. However, regulatory uncertainty and increasingly stringent attitudes from bodies such as the US Securities and Exchange Commission (SEC) have led to some crypto exchanges like Gemini to look towards offshore locations. The result is the growing number of platforms like the Gemini Foundation, which cater to a wider audience, but not users in the US, UK or EU regions.
The Gemini Foundation covers 30 jurisdictions, including Hong Kong, India, Switzerland, and Turkey. Additionally, Gemini plans on launching an ETH/GUSD perpetual contract in the upcoming weeks, with dated futures and options trading to follow. This foundation undoubtedly offers its users a capital-efficient, highly available, and trusted venue for trading derivatives.
It is vital to note that the new Gemini offshore derivative platform is located in Singapore, and it plans to introduce spot products soon. Account funding for trades will require a 1:1 conversion of USD into GUSD and USD Coin. However, the platform’s perpetual funding payments will have to be made exclusively in GUSD.
The launch of the Gemini Foundation coincides with Coinbase announcing its Crypto derivatives exchange, the Coinbase International Exchange, located in Bermuda. The increasing trend of US-based cryptocurrency exchanges moving abroad stems from the growing regulatory uncertainty and authorities’ hostile attitude, such as the SEC’s scrutiny. The SEC has recently filed legal actions on Beaxy and Bittrex and brought charges against Gemini for its now-defunct Earn program.
In conclusion, offshore platforms such as the Gemini Foundation are gaining prominence due to increased scrutiny and regulatory pressure at home. While this might limit access for major markets such as the US and the EU, it provides a more extensive reach for users from other countries around the world. As the foundation continues to expand, the conflict between efficient trading environments and regulatory requirements will undoubtedly continue to shape the landscape for upcoming cryptocurrency platforms.