United States-based crypto exchange Gemini announced on April 21 the upcoming launch of a derivatives platform outside the U.S. The move comes amid a tightening and uncertain regulatory environment for crypto firms in the country.
Dubbed Gemini Foundation, the offshore division will offer services to users based in Singapore, Hong Kong, India, Argentina, Bahamas, Bermuda, British Virgin Islands, Bhutan, Brazil, Cayman Islands, Chile, Egypt, El Salvador, Guernsey, Israel, Jersey, New Zealand, Nigeria, Panama, Peru, Philippines, Saint Lucia, Saint Vincent & Grenadine, South Africa, South Korea, Switzerland, Thailand, Turkey, Uruguay, and Vietnam. It will not offer services for customers in the United States.
The platform’s first derivatives contract will be a Bitcoin (BTC) perpetual contract denominated in Gemini dollars (GUSD), followed by an ETH/GUSD perpetual contract shortly thereafter.
1/ Introducing Gemini Foundation – a non-US crypto derivatives platform.
— Gemini (@Gemini) April 21, 2023
Eligible customers will be able to trade both spot and derivatives products, as well as convert USD and USD Coin (USDC) into GUSD on a 1:1 basis. Fees, profits and losses will also be processed in GUSD. The default leverage is set to 20x, with the maximum possible leverage at 100x.
Unlike traditional futures contracts, perpetual contracts never expire. Perpetual futures trading is not regulated by the Commodity Futures Trading Commission (CFTC). Exchanges offering crypto futures contracts, like BitMEX, are not available for U.S. customers.
The move comes a few days after Gemini revealed plans to establish a new engineering hub in India. The exchange’s founders Tyler and Cameron Winklevoss recently announced “big plans for international growth this year in APAC.” Earlier this month, Gemini filed a pre-registration with the Ontario Securities Commission to become a restricted dealer in Canada.
Gemini has been scrutinized by U.S. authorities. New York State’s Department of Financial Services is reportedly investigating the exchange over claims that many users believed assets in their Earn accounts had been protected by the Federal Deposit Insurance Corporation.
Gemini’s Earn program halted withdrawals in November, after its operating partner, Genesis, cited “unprecedented market turmoil.” In January, the firm filed for Chapter 11 bankruptcy. Reports at the time suggested that up to $900 million in Earn user funds could have been locked. The U.S. Securities and Exchange Commission also charged the exchange with offering unregistered securities through Earn in January.