Accounts SHUT DOWN
According to reports online, two over-the-counter (OTC) trading desks claim their accounts with U.S.-based exchange Gemini have been closed without any valid explanation.
The Gemini exchange, launched by Winklevoss twins Cameron and Tyler, have attempted to launch a Bitcoin ETF more than once in the past, though both attempts were rejected by the SEC.
Also stated in the claims is that the abrupt closure of the accounts may have been related to the attempt to redeem GUSD, the official stablecoin for the Gemini exchange, which was launched in late Q3 2018.
To preserve industry reputation, the OTC desks have remained anonymous with their claims against Gemini.
CoinDesk’s alleged communications with the anonymous OTC desks included concerning information regarding the stability of the Gemini “stablecoin.”
“When the desk later acquired GUSD from its own network, the trader said he was warned by Gemini staff that redeeming millions of dollars would harm the stablecoin.
So many players are unable to redeem, even very, very big OTC desks. Having an account doesn’t guarantee redeemability.”
This news raises a storm of controversy around the trusted exchange, which has always prided itself on its highly regulated status and its favoritism towards institutional traders compared to other digital asset exchanges.
Early Days: Crypto Exchanges Still Have No SET Industry Standard… YET
As stated earlier, the Gemini exchange follows more regulatory guidelines than most other exchanges in the emerging crypto sector.
A recent post made on the Gemini blog in late January explains how the exchange completed an SOC 2 Type 1 security compliance review:
“Gemini engaged with Big Four auditor Deloitte & Touche LLP (Deloitte) to execute a SOC 2® — SOC for Service Organizations Type 1 examination. After months of preparation and an in-depth external review, we are pleased to announce that Gemini has successfully completed its SOC 2 Type 1 examination.” – Gemini Blog
SOC 2 compliance is an industry standard for technology and financial service providers. With security as the benchmark, some of the key areas looked at in the review include confidentiality, privacy of data, and integrity for users.
While Gemini is the first exchange of its kind to receive this level of compliance, it also highlights how early digital assets are in their path to global adoption.
How many popular cryptocurrency exchanges would pass regulatory guidelines if prompted?
In time, we could see a standard guideline for cryptocurrency-driven platforms as institutional capital begins to enter the emerging sector and regulation becomes more clear.
This is not investment advice; please always do thorough research and only invest what you are willing to lose, especially in times of uncertainty.