This month, the Gemini exchange applied for a broker-dealer license from the Financial Industry Regulatory Authority (FINRA). The popular trading platform seeks to gain approval from FINRA as an Alternative Trading System (ATS). If successful, the Gemini exchange would be amongst an exclusive class of FINRA approved crypto organizations.
Gemini’s approach to the market has been to include regulators throughout every step of the platform’s development. In 2015, Gemini first received approval from the New York Department of Financial Services (NYDFS) to custody digital assets. The exchange was among the first to receive this licensing. Consequently, the exchange has held a strong position in the market.
Since that time, Gemini has sought approval on a number of occasions including when adding new tokens. For example, the exchange decided to seek NYDFS approval to add Bitcoin Cash (BCH) to the platform in December 2018. Now, the company wants to extend its approval to the national stage.
While Gemini continues to push for national approval, FINRA continues to drag their feet. Currently, there are 40+ applicants awaiting FINRA approval for blockchain-related projects. Unfortunately, the organization appears to be hesitant about supporting these firms at this point. Importantly, FINRA issued a statement this week discussing the approval process and the delays.
Gemini employed some unique strategies to date in order to service the growing demand for regulated security tokens. Previously, the platform partnered with Harbor to allow investors to purchase digital securities. For its part, Harbor provided users access to the platform’s stable coin – GUSD. Investors would make purchases and receive dividends using this stable coin.
In a recent interview, Harbor’s CEO, Joshua Stein took a moment to discuss the growing demand for security tokens by traditional investment firms, and why Gemini’s strategy is more efficient. He praised the firm’s pro-regulatory approach before describing how the new regulations altered the market since 2017.
An Inclusive Strategy
While many of the details of the company’s plans remain private, there are reports that indicate the platform will allow third-party securities to trade. If this is the case, you can expect to see Harbor as one of the main companies to take part in the exchange’s expansion.
The Gemini exchange is owned by the famed Winklevoss twins. These Harvard school graduates have long been pioneers in the crypto-space. Notably, in Dec 2017, the twins became one of the first official Bitcoin billionaires. Since that time, the Cameron and Tyler Winklevoss continued their crypto aspirations, which led to the founding of the Gemini exchange.
Gemini Aims High
The Gemini exchange seeks to be the dominant exchange in the crypto-sphere. If the firm is able to leverage its vast experience and network, it’s possible that FINRA may approve the company’s strategy moving forward. Regardless of the outcome, you can expect to hear more from this innovative platform in the coming weeks, as the security token sector continues to heat up.
Date: July 11, 2019