What Is the Gemini Exchange?
Let me tell you about the Gemini Exchange—it's a global cryptocurrency exchange that I think you should know if you're into crypto. Founded in 2014, the Gemini Exchange, also known as the Gemini Trust Company, comes from Cameron and Tyler Winklevoss, those famous investors, twins, and Harvard classmates of Mark Zuckerberg.
Key Takeaways
Here's what you need to grasp right away: Gemini Exchange is a cryptocurrency trading service that integrates an exchange, a fiduciary custodial service for digital assets, and an advanced trading platform. What sets Gemini apart is its custodial service that holds $200 million in insurance for its crypto holders. And remember, it was founded by the Winklevoss twins, who were classmates of Mark Zuckerberg at Harvard.
Understanding the Gemini Exchange
The Winklevoss brothers announced Gemini in early 2014, but it didn't go live until October 2015. As of Q2 2022, Gemini operates in more than 60 countries, including the U.S., U.K., and Canada. Just like other digital currency exchanges, Gemini lets you buy and sell various digital currencies, either with other digital currency—for example, using bitcoin to buy litecoin—or using fiat currency like U.S. dollars to buy digital currencies.
Fast fact for you: Gemini is the astrological sign representing twins.
Gemini Products
Gemini offers a diverse range of products for small investors and advanced traders, with features like charting and instant trades. The Gemini Exchange is the platform where you buy and sell cryptocurrency, available through web browsers and as an app. The mobile app includes the Gemini Wallet, which lets you pay for goods using your crypto holdings.
For advanced traders, Gemini provides its Active Trader Platform. According to the website, it features advanced charting, multiple order types, auctions, and block trading. They claim to execute orders in microseconds, but that might depend on how you define execute and what cryptocurrency you're trading.
The Gemini Custody product is a cold storage system for assets held by Gemini and a crypto-native finance platform. This custody is unique because it provides insurance coverage of $200 million for crypto holdings. It's a fiduciary and custodian licensed under New York Banking law, making Gemini arguably the most secure crypto exchange out there. Gemini also acts as a clearinghouse for off-exchange trades.
Important note: The Gemini dollar (GUSD) is Gemini's stablecoin based on the U.S. dollar. You can spend GUSD or a few other select cryptocurrencies with Gemini Pay, a function built into the Gemini app.
Gemini Exchange Plans
Gemini set itself apart in early May 2016 by becoming the first licensed Ethereum exchange in the United States. In May 2018, it became the world's first exchange licensed to offer Zcash trading. This followed a report that Gemini started offering block trading in April 2018, allowing you to buy and sell large orders of digital currencies outside the usual order books. Block trading was added to create additional liquidity opportunities.
Expansions and Partnerships
Gemini has expanded through partnerships with other organizations. The most notable is its partnership with Nasdaq, announced in April 2018. Through this, Gemini uses Nasdaq's SMARTS technology to detect fraudulent activity and manipulation of digital currency prices. Besides Nasdaq, Gemini partnered with Caspian, a digital currency trading and risk-management service.
Issues
Like most digital currency exchanges, Gemini has had its issues. In late November 2017, for instance, Gemini crashed for several hours due to high demand on its website. Rival exchange Coinbase crashed around the same time. In response, Gemini's team wrote on the company blog that this isn't the first scaling challenge they've encountered, and it won't be the last, adding that they're continuing to improve performance and infrastructure monitoring to anticipate problems more quickly.
Gemini works to ensure compliance with federal and state regulations for digital currencies. It markets itself as a New York trust company regulated by the New York State Department of Financial Services.
As of September 2023, the Securities and Exchange Commission's lawsuit against the exchange is ongoing. Additionally, one of its lending partners, Genesis, and its parent, Digital Currency Group, filed for bankruptcy in 2023. Gemini Earn members are at the top of the creditor's list, with more than $765 million owed to them.
What Is the Gemini Exchange Scandal?
Gemini used Genesis Global, a subsidiary of Digital Currency Group, as a lender. Genesis declared bankruptcy in January 2023, withholding funds for Gemini's Earn program. Thousands of Gemini customers couldn't withdraw funds as Gemini froze withdrawals—all of this followed the collapse of FTX, which impacted Gemini financially too.
Is Gemini Better Than Coinbase?
Gemini and Coinbase are both cryptocurrency exchanges, but they offer different services. Which one is better depends on how each serves your needs.
In Which Country Is Gemini?
Gemini is headquartered in New York, United States, but it's available to users globally.
The Bottom Line
The Gemini exchange is one of a handful of cryptocurrency exchanges available to U.S. crypto users. Like all U.S. exchanges, it's subject to issues from regulatory concerns, business relationships, and general cryptocurrency problems. It's one of the most popular exchanges and is owned by Cameron and Tyler Winklevoss.
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