According to a recent story published by The Information, Gemini is planning to introduce an international bitcoin derivatives exchange very shortly.
According to the article, Gemini has been quietly at work over the past few months in order to get the idea closer to becoming a reality.
As part of its efforts, the exchange is allegedly (1) in the process of reaching out to a number of companies that can supply it with an adequate amount of liquidity as it embarks on the process of working to establish a new exchange.
Gemini and Others Making Attempts to Fill The Void Left by FTX
It is important to point out that the failure of FTX in November could have been a big factor in Gemini’s decision to begin engaging in derivatives trading.
This is something that should be mentioned. A large portion of the market for trading derivatives was controlled by FTX until just before it went bankrupt.
But, as a result of its failure, Gemini and a number of other new rivals, including Binance and Coinbase, have gained market share.
Coinbase, a cryptocurrency exchange based in the United States, is now focused on expanding its operations into international markets. Coinbase, following in the footsteps of Gemini, plans to develop an overseas platform in which it will also be able to provide perpetual futures.
Why Are the Regulators Setting Things Off?
Gemini’s plan is to leverage its new international platform to provide perpetual futures particularly, and all indications point to this being a successful outcome.
This type of derivative is illegal in the United States, making the decision to proceed with it reasonably.
US regulators have maintained throughout the years that retail traders should not be permitted to trade perpetual futures because of the elevated risk involved.
They have made it clear on a number of occasions that the fact that these derivatives do not have a termination date and can be traded with a significant amount of leverage is a major selling point.
So, it may be in the best interest of businesses to offer them in locations that are not governed by the laws of the United States.
In spite of this information, however, certain cryptocurrency exchanges continue to find themselves in the line of fire of regulatory agencies.
For instance, the information that the Commodities Futures Trading Commission (CFTC) has filed a complaint against Binance has been widely disseminated throughout the whole week.
It has been alleged that Binance violated US derivatives trading rules when it instructed clients residing in the US on how to circumvent restrictions and utilize its foreign platform.
This was the case despite the fact that it was not authorized for use in the United States.
The moves taken by Binance have cast a new light on cryptocurrency businesses that make the claim that they run in other countries.
Coinbase is preparing for imminent enforcement action, while cryptocurrency exchange Binance is engaged in a legal dispute with the CFTC.
In addition, the United States Securities and Exchange Commission (SEC) just lately delivered a Wells Notice to the American exchange.