Gemini, the cryptocurrency exchange founded and run by Cameron and Tyler Winklevoss, has expanded to the UK, starting off with trading in Bitcoin and ether, the native coin of the Ethereum network.
The Winklevoss twins have taken a gold-plated approach to regulation from the start with a view to attracting the main men of finance to Bitcoin. They said the same approach would be duplicated in the UK and Canada (where they expanded two weeks ago), and are looking to add the ability to trade fiat currency with Bitcoin/ether within the coming weeks.
Gemini said the decision to start with BTC/ETH was more of a technical road map than about meeting any specific regulations. Tyler Winklevoss told IBTimes: "We wanted to come out with something first, and sooner rather than later, and then we will continue to expand the suit of services in coming weeks."
Bringing big blue chip clients to the Gemini exchange has been a success, said Tyler. "We have market participants on exchange that simply would never be on another exchange. We have built an exchange on which the larger financial institutional players can now finally do business in Bitcoin.
"We have been pro-regulation from day one, and we believe that building on-ramps to the main men of finance is important and we are seeing that play out, evidenced by the institutions that have signed up. They would not do business with anyone else other than Gemini."
Crypto regulation in the State of New York is not for the fainthearted. So is it a less onerous proposition in the EU or UK?
Tyler said: "We went for a trust company in New York, and it took us about a year and a half to achieve that licence. That's a New York banking law licence, with those banking standards of compliance, capital requirements, and anti-money laundering rules - so that was definitely an onerous task.
"My understanding - although I'm not an expert on it – is that regulations relating to similar licences in the EU are not very much different as far as standards are concerned. I think there's a lot of communication across the ocean between regulators."
He said that having gone through the motions of attaining trust company status would mean some experience and institutional knowledge could be leveraged. "Having done it once before it would probably be quicker - at least on our end, but that's as far as I could probably say."
The Winklevoss brothers have been watching Bitcoin and latterly Ethereum, and have maintained Bitcoin rivals gold as a store of value and that it is undervalued. "If it is a better gold and its going to disrupt gold then there potentially is a 100x appreciation. Look at the market cap of Bitcoin being $12bn and the value of gold out there in the trillions. There's a lot of room for appreciation. We have said for a long time that Bitcoin is better gold."
Regarding the Ethereum network and trading in ether, Tyler said: "I have always felt that Bitcoin is more of a safe haven type asset. Its supply is actually more fixed than ether. We feel that Bitcoin's killer app is Bitcoin itself. Other blockchains and other cryptocurrencies like Ethereum can go out and perform sort of laboratory for experiments like the DAO - and of course the DAO's vulnerability is not a vulnerability of the Ethereum network or ether. It's a growing pain. Bitcoin had its growing pain moments many times and this one of those for Ethereum."
In terms of the increases in both cryptocurrencies, coupling, decoupling and so on, exchanges benefit from high volume of trading this can attract. "Certainly as an exchange, we make our money from increased volume so whenever there's higher volume, it's a better day for us.
"Bitcoin has been appreciating quite nicely over the past few weeks but before that it was more stable than gold for a period of 28 days. Bitcoin has demonstrated that it can be a mature asset that has a lot less volatility than gold so I think that our theory is playing out that Bitcoin is a store of value."
So does the Gemini expansion roadmap include a possible move into China, the home of cryptocurrency trading?
"It's definitely not off the table. We are open to expanding to any jurisdiction. Of course the UK and Canada is little a bit easier. There's not a language barrier; Canada is primarily the same time zone. But as we grow it would make sense to keep looking east.
"It would take some degree of education and resources. But there is so much demand for Bitcoin in China, it's probably worth the investment of time and money to get a licence and get out there at some point."