Gemini Trust Company, a bitcoin exchange founded by brothers Cameron and Tyler Winklevoss, revealed today that it received launch authorization from the New York State Department of Financial Services (NYSDFS).
Gemini has begun briging on customers and will officially open for trading on Thursday October 8th, at which point customers will be able to buy and sell bitcoin for fiat currency. Gemini is a fiduciary and is uniquely permitted to accept and service both individual and institutional customers.
Gemini says that it will custody all bitcoin deposits, the majority of which will be held in its offline, air-gapped, multi-signature, geographically-distributed cold storage system. All fiat currency transferred to Gemini will be deposited in an FDIC-insured New York State chartered bank.
To manage the exchange, the Winklevoss twins have brought in security and financial engineers who have previously worked at Virtu Financial, TwoSigma, Bridgewater Associates, Google, Microsoft and AirBnB.
Cameron Winklevoss, President of Gemini, commented:
Our position from day one was to ask for permission, not forgiveness. We worked very hard over the past year to obtain a limited liability trust company charter by meeting the high-water mark of banking compliance. Similar to other premier financial institutions Gemini is safe and compliant. In addition, we’ve built Gemini with a security-first mentality from day one.
Gemini CEO Tyler Winklevoss added:
Bitcoin is an island right now and Gemini is building a bridge to the financial mainland. Gemini is simple and easy-to-use for a first-time bitcoin buyer while at the same time powerful enough and feature-complete for a professional trader. We didn’t apply for a BitLicense because we wanted to build an exchange that both Main Street and Wall Street could use and trust, so we decided to obtain a limited liability trust company charter in order to do so. Even though this path was more costly and time-consuming, it was necessary to fulfill our goal of serving institutional customers.
Gemini’s launch ends a regulatory approval process that began in early 2014 and required, according to the company, an anti-money laundering (AML) program, internal controls and procedures, comprehensive security program and significant capital reserves. In addition, Gemini built its own proprietary cold storage vaulting system to custody bitcoin and require all users to use two-factor authentication when using the platform.
Transfers to and withdrawals from Gemini are free but nominal trading fee applies to both the buyer and seller, which is currently set at 25 basis points of the value of a trade. Gemini offers an API for customers who wish to connect and trade programmatically.
In May 2015, DFS granted the first charter to a New York virtual currency firm, itBit Trust Company. In September, 2015 DFS granted the first BitLicense application to a virtual currency firm, Circle Internet Financial. To date, NYDFS has received 25 BitLicense applications. NYDFS is continuing to review and accept applications and proposals from other virtual currency companies.
Acting Superintendent Anthony Albanese said this in regard to the BitLicense:
In New York, we are continuing to move forward on licensing and chartering virtual currency firms. Smart, targeted regulation that helps protect consumers and prevent illicit activity is vital to the long-term future of this industry.