This Monday the Gemini Trust Company, a bitcoin exchange operated by the Winklevoss brothers, was granted a limited purpose trust charter by the New York Department of Financial services. Circle, which provides payment services, was the first firm to receive a state BitLicense while ItBit, which operates an exchange like Gemini, also received a trust charter. The second charter was granted to itBit Trust Co. in May.
In June, the regulator published its final rules outlining which virtual-currency companies must apply to the regulator for the BitLicense allowing them to operate in New York State.
Tyler Winklevoss, chief executive officer of Gemini stated:
“We didn’t apply for a BitLicense because we wanted to build an exchange that both Main Street and Wall Street could use and trust, so we decided to obtain a limited liability trust company charter in order to do so.”
Gemini Trust Co., the Bitcoin exchange founded by Cameron and Tyler Winklevoss, is the highest-profile Digital-currency firm to receive a charter since the New York regulator issued a public order in March 2014 requiring virtual-currency exchanges to apply for such clearance.
Because Gemini received a trust charter and it does not need to register with the Financial Crimes Enforcement Network as a money-services business or get a money transmitter license in all the states that it operates Gemini will be able to operate in 26 states and Washington, D.C.
Cameron Winklevoss commented on the company’s Blog:
“Meeting the high-water mark of banking compliance is no small task, especially for a startup, but we felt that doing so was crucial. Gemini must look and feel as safe, secure and compliant as any other top tier financial institution in the world. Gemini is statutorily exempt from being required to register with the Financial Crimes Enforcement Network (“FinCEN”)*, a bureau of the U.S. Department of Treasury, because Gemini is a state chartered limited liability trust company.”
All fiat currency such as U.S. dollars transferred to Gemini will be deposited at New York-based Signature Bank, headquartered in Manhattan. The deposits will be eligible for Federal Deposit Insurance Corp insurance, subject to applicable limitations.
Last month, the Commodity Futures Trading Commission designated bitcoin an official commodity. Meanwhile, the Winklevosses are also among those looking to creating bitcoin exchange-traded funds (ETFs), enabling people to invest in bitcoin without even having to own any.
Regulators are trying to apply a greater scrutiny to Digital currency related Businesses and Gemini did everything in their power to be able to comply with the regulation demands.
Although the Winklevoss brother’s Gemini exchange is already accepting early access requests, it is only set to launch its exchange trading services next Thursday.