Gemini Expands Institutional Offerings With OTC Clearing Service

Neil Dennis

Gemini, the cryptocurrency exchange and custodian service co-founded by Tyler and Cameron Winklevoss, announced the launch of Gemini Clearing, a trade settlement service for off-exchange and over-the-counter cryptocurrency transactions.

The new service provides regulated clearing and settlement for large, off-exchange trades that are negotiated bilaterally between counterparties or brokered via a third party.

Benefits

Gemini Clearing list five main benefits for using its service:

  • Clearing and Settlement - a trade settles immediately or within an approved window of time
  • Couterparty Risk - no funds are transferred until both parties of the trade are fully funded
  • Regulatory Compliance - each party is subject to robust know your client (KYC) and anti-money laundering (AML) screening
  • Privacy - trade details are known only to the counterparties involved
  • Non-Circumvention - Gemini does not have an over-the-counter desk

Institutional Moves

Gemini's clearing service is not the company's first move towards expanding its institutional offerings. Earlier this week, the company announced the introduction of sub-accounts for its institutional customers.

These sub-accounts allow financial institutions such as banks, fund managers and hedge funds to create and manage multiple accounts from a single master account so investors can segregate trading strategies, funds or groups of customers.

And last week Gemini joined Silvergate Bank's payments network to allow institutional customers to deposit and withdraw cash from their Gemini accounts instantly and at any time.

Coinbase Preparing for Stock Market Listing as Early as This Year: Report

San Francisco-based cryptocurrency exchange Coinbase has reportedly started preparing for a stock market listing that could come as early as this year.

The move would make Coinbase the first major U.S.-based cryptocurrency exchange to go public, but the listing would require the U.S. Securities and Exchange Commission’s (SEC) blessing. According to Reuters, one source claimed the exchange is considering a direct listing instead of a traditional initial public offering (IPO).

While in an IPO new shares are created, underwritten and sold to the public, in a direct listing no new shares and created and only outstanding shares are sold, with no underwriters involved. Reuters quoted three people familiar with the matter, who requested anonymity because the listing preparations are reportedly confidential.

Coinbase has not yet registered its intention to go publish with the SEC, but has already reached out to investment banks and law firms. The cryptocurrency exchange was valued at $8 billion in its latest private fundraising round in 2018.

It was founded in 2012 and now has over 35 million users, allowing them to trade various cryptoassets both on its Coinbase platform and on the Coinbase Pro platform. It also has multiple other services, including Custody, Commerce, and Earn.

The San Francisco-based firm’s bitcoin holdings are estimated to now be over 1 million BTC, as users deposit funds on it over time. Last month Coinbase revealed it suffered outages after seeing its traffic spike significantly in a few minutes, as the price of most cryptocurrencies moved abruptly.

As CryptoGlobe reported, CryptoCompare’s June 2020 Exchange Review showed Coinbase was the third-largest top tier crypto exchange by trading volume in May, trading $6.86 billion worth of crypto throughout the month, falling behind OKEx and Binance.

Featured image via Unsplash.