The Winklevoss brothers have announced a new service called Gemini Clearing. It is an OTC trading platform that will be open to both institutional and retail traders. This is significant news considering that many exchanges, such as Huobi and Coinbase, have opened an OTC service but only dedicated to institutional clients.
The future of money will be BOTH retail and institutional. @Gemini is proud to offer Gemini Clearing™, a fully-electronic clearing and settlement solution for off-exchange or over-the-counter (OTC) crypto trades. Anyone can use it. https://t.co/ru4BoowIKC
— Cameron Winklevoss (@winklevoss) September 5, 2019
The Gemini exchange, which recently opened a new office in Chicago, was founded in October 2015 by the twins Cameron and Tyler Winklevoss. The name of the exchange actually means “twins”.
The exchange is trying to stand out by launching new functions and services. Recently it introduced the sub-account function for institutional clients, it allows creating an unlimited number of accounts associated with a single main account. It is the first cryptocurrency exchange in the world to support this option.
The twins hired Noah Perlman as their new Chief Compliance Officer. Perlman comes from the world of traditional financial services: he previously worked for Morgan Stanley.
OTC (Over-The-Counter) trading is not allowed on Gemini and some users who have attempted to be cunning have had their accounts closed. That’s why the twins decided to launch a platform specifically for off-exchange trading in a regulated and secure manner.
Off-exchange or OTC cryptocurrency trading is a type of trading in which an agreement is made directly between two interested parties without the interference of an exchange. OTC is becoming increasingly popular, Kraken, for example, confirmed that volumes on its OTC platform have grown by a factor of 20 since the beginning of this year.
Gemini Clearing is fully digital and provides a service that aims to reduce risk and ensure immediate settlement. Another key point is privacy, the details of the agreements between users are kept private. Gemini requires KYC and BSA/AML from all users.
As confirmed in the announcement, an agreement between two users can also be reached through third-party brokers. The platform guarantees that there will be no transfer of funds until both parties have given their approval.