Winklevoss-Backed Gemini Exchange Applies For Broker-Dealer License For Crypto Security Trading
Being established and headed up by the well known Winklevoss twins – Gemini is gearing up to apply for its own license to operate as a broker and dealer from the United States' Financial Industry Regulatory Authority (FINRA), according to news sources this week.
For the company, and exchanges overall, this represents a pretty interesting step forward in becoming a legally recognized Alternative Trading System, allowing their customers to easily trade digital securities along with digital assets.
In the past, the Gemini partnered up with the tokenized securities organization known as Harbor. The partnership in question allows institutional investors between both to purchase a range of securities with the Gemini affiliated stablecoin – GUSD – while also receiving dollar-denominated dividends with this same coin. With this already existing partnership providing an in-road for securities, it makes perfect sense for Gemini to look towards trading securities on its own.
Harbor's CEO, Joshua Stein, discussed the kind of institutional investment that persists over 2019 during an interview back in February of the same year. Specifically, Stein explained that brokers, family officers along with investment banks, have demonstrated that they are “interested at a significant level” in the kind of potential associated with tokens. This remained the case even during the times when the regulatory climate for tokens became frigid over the course of 2017's market craze.
Over the course of this year, the platform has placed a special emphasis on the kind of potential that these security tokens have in the world of real estate as well as startup equity fundraising,
“The [Gemini] team is very easy to work with and we are aligned in terms of taking a proactive regulatory approach and addressing the needs of the institutional players in the market,” this is according to a discussion held by Kevin Young, the marketing lead for Harbor.
So what is the first step for Gemini here? According to an internal source that's savvy to Gemini, is that it intends to permit securities from a range of third party platforms such as Harbor, allowing them to eventually be traded through Gemini. While this is a good plan of attack, there is still the outstanding issue of obtaining the necessary approvals, which will take some time.
The whole process of getting approvals for a solution like this shouldn't take too long with the support of a supportive regulatory body. Sadly, this doesn't seem to be the case with the FINRA, which has so far proven itself to be recalcitrant when it comes to actually approve broker-dealer applications from crypto securities companies.
The organization itself has effectively stonewalled more than 40 separate applications, leaving them with waiting times of more than 14 months. It's because of this that the climate for Gemini is looking more overcast as opposed to being sunny. But time will tell if Gemini can become a trailblazer for tokenized securities.
Gemini has already made some pretty impressive progress, having already qualified on a state level to provide custodial service for digital assets, an approval that the company received back in 2018 thanks to the New York Department of Financial Services.