Gemini to launch overseas derivatives exchange: The Information

The U.S.-based crypto exchange is looking into opening an international derivatives exchange after the industry has come under pressure recently, two people familiar with the matter told The Information.

The CFTC’s civil action against Binance last week, stemming in part from violations of derivatives trading laws, has prompted Gemini to examine crypto operations overseas, as The Information reports.

Related: Binance CEO Changpeng Zhao rejects CFTC accusations

Gemini is a New York-based crypto exchange regulated by the New York State Department of Financial Services and already has an international presence: it offers spot trading, staking and other products in over 60 countries, including the United States.

However, the new planned derivatives platform would focus primarily on offering perpetual futures, a form of derivatives banned in the U.S. for retail investors and considered a very risky product due to its lack of an expiration date and high leverage.

Gemini isn’t the only crypto exchange considering this option. Kraken, for example, already offers derivatives trading outside the U.S., with leverage of up to 50 times the amount posted, according to its website.

Related: Kraken shuts down staking 

Coinbase, a leading U.S. exchange, is looking into launching a platform outside the U.S. to offer perpetual futures after receiving a Wells Notice from the SEC – a step before the regulator takes legal action against the exchange.

Related: Coinbase receives Wells notice

Gemini has also come under pressure from the regulator recently. In January, the SEC sued Gemini over its high-yield Gemini Earn product with Genesis, the now-bankrupt crypto lender. The SEC alleged that both companies offered unregistered securities. Gemini laid off 10% of its staff in January, which The Information first reported. 

Related: SEC charges Gemini and Genesis with offering unregistered securities