The Winklevoss twins, best known for their dispute with Mark Zuckerberg over the idea for Facebook, will open their institutional bitcoin exchange ‘quite soon,’ according to a recent email.
Emails were sent to institutional traders, including traders that belong to pension funds, mutual fund families, and insurance companies. The exchange is asking them to begin the process of opening accounts for trading on Gemini.
“Just wanted to clarify that the emails sent out today were sent to institutional customers (who signed up to our early access list) in order to begin the process of setting up their account — there’s more KYC work to do to get institutions onboarded than individual customers, hence why we have started to get the process started with these folks earlier,” wrote Cameron Winklevoss.
“We’ll be sending out invites to individuals once we’re ready to launch, which we expect to be quite soon.”
— – Cameron Winklevoss
The news comes just weeks after the Winklevoss twins announced that they had filed to become a trust, operating within the state of New York. If granted the trust status would allow them to operate the exchange without a BitLicense. According to a blog post by Houman B. Shadab, a professor at New York Law School and the Editor-in-Chief of the Journal of Taxation and Regulation of Financial Institutions, trusts are legally distinct financial institution from banks, but can hold and lend money.
Earlier this year, in May, itBit become the first bitcoin startup to be granted a trust. The startup operates a Wall Street style bitcoin exchange and recently revealed its project Bankchain, a distributed ledger based on blockchain technology built to help banks settle payments between other institutions.
“itBit, in particular, is authorized as a limited purpose trust company,” continued Shadab in his post. “This means it is not allowed to make loans or take deposits. To obtain the charter, itBit had to meet the very strict requirements of ordinary New York chartered commercial banks and subject itself to ongoing oversight. However, itBit is not required to obtain insurance from the Federal Deposit Insurance Corporation (FDIC), and it is subject to a much lower level of minimum capital–$2 million versus at least $50 million for a commercial bank.”
It is unclear what type of trust the Winklevoss twins filled for, but it will likely help them leaps and bounds when securing the partnerships and deals needed to operate the exchange.
“We are also thrilled to announce that we have secured a banking relationship with a New York State-chartered bank,” the Winklevoss twins announced earlier this year in a blog post.
“Your money will never leave the country. It also means that US dollars on Gemini will be eligible for FDIC insurance and held by a US-regulated bank. Your US dollars on Gemini will be as safe and secure as they are in your bank account today.”
— – Gemini
The Winklevoss twins, who reportedly own 1% of all bitcoins in existence, think bitcoin will be the new gold. The twins have said on numerous occasions that they see bitcoin as potentially becoming a world reserve currency.
They have also been working on a bitcoin ETF (electric traded fund), which was publicly announced before Gemini. The ETF, despite being highly anticipated by bitcoin enthusiasts and Wall Street traders alike, has yet to materialize.