Geminia major cryptocurrency exchange based in the UNITED STATESannounced in a communicated his intention to create a offshore crypto derivatives platform called Gemini Foundation. The move comes as regulatory scrutiny intensifies in the United States. The first product on the new platform will be a Bitcoin (BTC) perpetual contract denominated in Gemini dollars (GUSD), followed by an Ether (ETH) perpetual contract also backed by GUSD.
Gemini Foundation will allow the use of trading leverages up to x100 by taking positions on perpetual contracts. The latter have no expiration date unlike futures contracts.
We are excited to announce the upcoming launch of Gemini Foundation – a non-US crypto derivatives platform. Our first derivative contract will be a BTC perpetual contract denominated in Gemini dollars (GUSD). A perpetual ETH/GUSD contract will be launched soon after.
US regulatory tightening affecting cryptocurrency exchanges
The decision to establish an offshore platform coincides with increased regulatory pressure on cryptocurrencies in the United States. In January, Gemini And Genesis (sister companies owned by Digital Currency Group) have been accused by the DRY (Securities and Exchange Commission) to sell securities (titles) not recorded. Coinbase, another cryptocurrency giant in the United States, is also under regulatory scrutiny. THE CEO Brian Armstrong said this week that the company would consider moving if regulatory clarity does not improve.
Offshore locations are not safe from US authorities
Although the offshore location of Gemini Foundation may offer some respite from U.S. regulators, it does not guarantee immunity from enforcement action. Binance, the world’s largest cryptocurrency exchange, was sued in March by the Commodity Futures Trading Commission (CFTC) for several alleged violations, despite being headquartered outside the United States. Moreover, FTXwhich was based in the Bahamas, saw its former CEO, Sam Bankman-Fried, face criminal charges in the United States.
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