The billionaire twins, Tyler and Cameron Winklevoss, known for their involvement with the crypto exchange Gemini, have recently faced numerous setbacks and challenges. With a shrinking market share, regulatory complications, and a lawsuit by the SEC, it is not easy for the exchange to make a comeback.
As the market steadily recovers, Gemini’s small market share and the increasing regulatory scrutiny cast doubt upon the exchange’s future prospects. According to Eswar Prasad, a professor at Cornell University, the situation may make it difficult for the firm to find a suitable place in the market, especially considering the skepticism of retail investors following recent market turmoil.
In an attempt to address these issues, the Winklevoss twins were recently spotted in London, where they met with regulators and discussed the possibility of establishing a second headquarters in the UK. Shortly after, it was announced that Gemini would make Dublin its new European base. Furthermore, the company has launched a derivatives exchange, Gemini Foundation, in several jurisdictions outside the US, UK, and European Union while announcing plans for an engineering hub in India.
Despite their personal fortunes of $3.2 billion each, the brothers must attract more trading volume to Gemini, as this is crucial for the platform’s success. The exchange experienced a steep decline of 46% in trading volume during the first quarter compared to the last quarter of 2022. Some analysts suggest that a merger with bigger players, such as Coinbase or Kraken, might be a beneficial outcome for Gemini.
However, the legal issues surrounding the exchange may complicate matters further. One such issue is the defunct Earn product, with customers unable to withdraw their funds since the bankruptcy of Gemini’s lending partner, Genesis Global Capital, in mid-November. Additionally, the SEC has sued both companies, alleging the sale of unregistered securities through Earn.
The regulator is seeking permanent injunctive relief, disgorgement of gains, interest, and civil penalties. SEC’s Office of Internet Enforcement’s former chief, John Reed Stark, stated that one of the remedies sought would be to ensure every person gets their money back.
Ultimately, the combination of setbacks faced by Gemini raises questions as to whether it can bounce back and regain its position in the market or if it will remain in limbo. The future of the exchange may heavily depend on its ability to address the regulatory issues and cater to the needs of the skeptical investors.
Source: Cryptonews
