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Winklevoss Twins expect to get regulatory approval to open their bitcoin exchange in the first quarter, Reuters reports.
Winklevoss Capital, the firm founed by Cameron and Tyler Winklevoss, is waiting for government permission to launch new U.S.-based Bitcoin exchange, called Gemini, in the first quarter, the twins told Reuters yesterday.
“The information coming out of the DFS (Department of Financial Services) is that Q1 is their goal. And we will be ready by then,” Cameron Winklevoss, a principal at Winklevoss Capital, said in an interview at ETF.com’s Inside ETFs Conference held in Florida.
Winklevoss Capital employees are based in the Winklevoss Capital offices, located in Manhattan, New York City. The team includes chief compliance officer Michael Breu, who previously headed information security in the research department at Bridgewater Associates, Katten Muchin Rosenman, a specialist of financial regulations, and security lead Cem Paya, who previously occupied the same position at Airbnb.
Gemini’s software was created by a developer from New York-based hedge fund company Two Sigma, who built a system that will suit both small investors and large institutions looking for direct access to the trading platform.
Meantime, US bitcoin wallet provider Coinbase has opened the first regulated bitcoin exchange in the U.S, after receiving a whopping $75 million funds from investors, including Spanish bank BBVA, NY Stock Exchange and a number of venture capital companies.
The exchange, entitled Lunar, got “regulatory approval” from half of all the U.S. states, New York and California among others. The transactions will imply a 0.25% fee, although according to a co-founder Fred Ehrsam, during the first 2 months Coinbase won’t charge any fees.
The Winklevosses are planning to open a regulated exchange, due to a large number of unregulated and offshore exchanges in the U.S. “With a bitcoin exchange you have to build it like you are a real financial institution,” said Tyler Winklevoss. “Most bitcoin losses have not been due to theft or hacking, It has been due to user error. It is people forgetting their passwords or losing their keys.”
In an official blog post, the twins described Gemini as “a next generation bitcoin exchange”.
“It’s true that Bitcoin’s promise is a new, frictionless money, but that all becomes academic if we don’t build towards an ecosystem that is free of hacking, fraud and security breaches,” they wrote.
The brothers added that in order to increase people’s confidence in digital currency, they partnered with a New York State-chartered bank, what means the money of exchange users will never leave the country and will be securely held in their bank accounts. Besides, the dollars will be eligible for FDIC insurance and will be kept by a US-regulated bank.
Being the prominent investors in bitcoin, the Winklevosses expect the new exchange will contribute to the future expansion of cryptocurrency amid its high price fluctuations and hacking incidents.