In recent news that the Bitcoin world regards as promising, Tylor and Cameron Winklevoss (the Facebook twins) are reportedly waiting for advisers to recommend a ‘strategic’ move to commence crypto trading and custody services in UK, even as the non-fiat currency showed sharp downward movement in the markets.
If such a recommendation were to come true, it could well be a disruptive move for Gemini, the crypto-exchange held by the twins’ Gemini Trust Company. The exchange is already listed in the Top-100 exchanges by way of volume traded, considering that it became operational as late as 2014.
Sources reveal that the Winklevoss twin’s company could well be in the final stages of filing an application with regulatory authorities in the UK, in this regard. The New York-based exchange is expected to continue offering its standard custody services and crypto trading services in the island nation as well. However, the scenario may not be all that advantageous for Gemini, since crypto exchanges have proliferated in most markets of the world.
Too Many Exchanges already
With over 400 exchanges worldwide, Crypto exchanges are no longer a rarity. These exchanges famously clocked bumper revenues towards the closing months of 2017. Unfortunately, the 10 months in 2018 have been quite tragic for the soaring cryptocurrencies. From fancy prices of $20,000 for a Bitcoin, prices have now fallen to anywhere between $5,000 and $7,000 as per market trends. The result of such a major sell-off is that the industry has suffered.
Additionally, governments such as the one in the UK are cautious about treading deeper into the world of cryptocurrencies as “wild west” speculations continue to create worries and crypto-asset markets show losses and remain a haven for money-laundering investors.
Conflict of interest for exchanges
While the number of exchanges would be overwhelming, more legal concerns were raised lately by the New York Attorney General’s office. The federal agency has reported that cryptocurrency exchanges are likely to be in a “pervasive” conflict of interest. Many of the exchanges were seen to play investors at “high levels” of trading using their own accounts, placing the entire transactional process at great risk, the agency indicated. In addition, these exchanges remained casual in their approach to preventing market manipulation, the Attorney General’s office reported.
Security becomes a priority
However, as the industry becomes more standardized, many exchanges are seen investing in comprehensive security protocols and compliance. Many traditional markets are also seen to be quickly adopting cryptocurrencies, and exchanges see bigger opportunities for themselves in these overseas markets.
The latest example of such self-examination has been Gemini itself. The cryptocurrency exchange allowed the NASDAQ stock exchange to evaluate its trading venue for “market abuse.” It has also sought the necessary compliance requirements by setting up its BitLicense framework, apart from seeking accreditation from New York’s Department of Financial Services.
Recently the exchange stated that it received approval from the state to offer digital currency which is “pegged” to the US Dollar.
UK Regulatory scene
While Gemini complies with the US Financial regulatory needs, it is a different scenario for the progressive exchange in the heavily-regulated UK and European markets. The UK currently does not use its Financial Conduct Authority to monitor crypto exchanges such as Coinbase. It uses a different framework instead. The eMoney License currently oversees the activities of crypto exchanges, such as Coinbase, making it mandatory for the exchange to check its customers for money-laundering, much like the country’s banks.
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Source: Crypto Potato