The cryptocurrency exchange of Winklevoss brothers, Gemini has decided to put an application for a Broker-dealer license. The platform has applied for the same with the FINRA. Their objective is to work as an alternate trade service and let the user use the platform legally for the swap of digital assets.
With the rise of digital assets as an investment vehicle, the cryptocurrency exchanges have started to offer wallets and other custodial services. But this has given escalation to specific questions like who will guarantee that these platforms will not misuse customers assets.
Respond to these questions; the broker-dealer will work as a template to regulate the digital currency platform. The situation that cryptocurrency exchanges are facing today has similarities with the problem that was met by broker-dealer in the 1960s.
This is the initial step of the platform to become the legalized alternative trading platform to swap the digital assets legally.
Although many cryptocurrency companies’ approached FINRA for the broker-dealer license, its stance is still unclear about the approval. Till date, about 40 applications have reached FINRA, and the companies are waiting for the last fourteen months for their answer, but none have received any reply from them.
The tokenized security platform Harbor is a partner of Gemini. The partnership lets institutional customers use GUSD, the stablecoin of Gemini to buy securities; they also can receive USD denominated dividends through GUSD. So, it becomes evident that Gemini would like to facilitate the trading of these securities. A source close to the platform has also told that Gemini intends to allow external securities to trade on their platform. But getting regulatory approval may consume some time.
In the previous few years, the digital currency has become the hottest investment. As a more significant number of investors start to finance in digital currencies, regulations should also begin for the broker-dealer of these currencies. If they are left unregulated, the problems surrounding them will increase. Now it is interesting to see whether Gemini gets the green indication from FINRA to become an exchange for tokenized assets.
Gemini has already received approvals from NYDFS in 2015 to virtual custody assets at the state level. Apart from this, check out the full review of Gemini crypto exchange by CryptoNewsZ to know more details of this platform in one place.