US-based cryptocurrency exchange Gemini has revealed that it is planning to open an offshore derivatives platform.
The decision was announced as regulatory pressures in the United States continue to grow, with a mass withdrawal of crypto organizations currently taking place.
A New Crypto Derivatives Platform
The move comes shortly after Gemini announced that it would be relocating its engineering hub and developers to India. Gemini revealed its plans to launch an offshore derivatives platform under a new division called the Gemini Foundation. According to Gemini, the new platform would allow users based outside the US to trade in the spot and derivatives markets. According to the official announcement, the platform’s first product would be a BTC perpetual contract denominated in GUSD, which is Gemini’s stablecoin with its value pegged to the United States dollar. Following this, an Ethereum perpetual contract (ETH/GUSD) is also expected to launch. According to the statement,
“Gemini Foundation will allow eligible customers to leverage their crypto assets to achieve long or short crypto exposure in order to manage risk, generate returns, and gain directional exposure. Eligible customers will be able to trade both spot and derivatives products and execute all of their trading strategies within a secure and trusted platform.”
Available In A Host Of Jurisdictions
According to Gemini, the Gemini Foundation will allow eligible users to leverage their crypto assets and gain exposure to the underlying asset’s value without actually owning the asset. The derivatives trading platform will be available to users in a number of countries such as Hong Kong, India, Israel, Singapore, Thailand, Bermuda, Bahamas, British Virgin Islands, Brazil, Bhutan, Cayman Islands, Egypt, Chile, Guernsey, El Salvador, Jersey, Nigeria, New Zealand, Panama, Nigeria, Peru, Philippines, Saint Vincent & Grenadine, Saint Lucia, South Korea, South Africa, Switzerland, Turkey, Thailand, Uruguay, and Vietnam.
There has yet to be any clarity on an exact launch date. However, the announcement did feature a link for interested users to sign up and gain priority access. Users that sign up will be notified once the platform is ready.
Search For A Favorable Regulatory Environment Continues
Gemini’s decision comes as regulatory scrutiny against crypto firms in the United States continues to get more intense. Since the beginning of the year, the United States Securities and Exchange Commission (SEC) has hit several crypto firms operating in the US with a host of charges. Many view these actions as necessary following the catastrophic collapse of FTX and the implosion of TerraUSD. As a result, the first few months of 2023 have been incredibly difficult for the crypto space and crypto entities operating in the United States. Gemini has already announced that it is relocating its engineering hub and all of its developers to India. However, the country is yet to fully embrace the idea of cryptocurrencies, although there is an easing of its position when it comes to digital assets. This could be a result of the evolving crypto environment in South Asia. The country’s finance minister, Nirmala Sitharaman, has proposed that G20 nations create a standard framework for crypto and digital assets.
However, despite being located outside the United States, the Gemini Foundation could still be in the crosshairs of regulatory authorities based in the United States. Binance is not based in the United States, yet it was sued by the Commodity Futures Trading Commission (CFTC) for several alleged violations. FTX also was based in the Bahamas, but that did not prevent CEO Sam Bankman-Fried from facing criminal charges in the United States.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
