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Cameron and Tyler Winklevoss are launching a new Bitcoin exchange called Gemini Trust Company, with trading set to begin at 9:30 a.m. ET on Thursday, Oct. 8.
The twin Winklevoss brothers achieved notoriety back in 2009 after settling with Facebook founder Mark Zuckerberg for $65 million over alleged intellectual-property infringement. The Winklevoss twins first sued Zuckerberg in 2004 alleging that the idea for Facebook was stolen. Zuckerberg was hired by the Winklevoss twins to work on their ConnectU social networking site in 2003.
With Gemini, the Winklevoss brothers enter a very different space than that of social networking. The Bitcoin cryptocurrency market has been in a state of flux since the collapse of one-time leading exchange Mt. Gox in 2014, when customers lost $473 million.
In the wake of the Mt. Gox failure, the need for regulatory compliance and security has become paramount to help both Bitcoin users as well as the larger market have confidence in the cryptocurrency system. Into that environment, Gemini applied for and received an Authorization Certificate from the New York State Department of Financial Services (NYSDFS). The Authorization Certificate is an important milestone as it enables Gemini to legally operate as a chartered limited liability trust company. Gemini is able to work with both institutional and individual consumers and is able to both buy and sell Bitcoin in exchange for U.S currency.
“Our position from day one was to ask for permission, not forgiveness,” Cameron Winklevoss, president of Gemini, said in a statement. “We worked very hard over the past year to obtain a limited liability trust company charter by meeting the high-water mark of banking compliance.”
Tyler Winklevoss, chief executive officer of Gemini, added that Bitcoin is an island right now, and Gemini is building a bridge to the financial mainland. From a compliance perspective, Gemini has also been able to demonstrate that it has a strong anti-money laundering program as well as capital reserves, which should further help to boost confidence.
In the Mt. Gox collapse, security was the primary issue as allegedly secure systems were breached and reserves stolen. At Gemini, the Winklevoss brothers state that they started the company with a security-first mentality. Bitcoin deposits held in custody by Gemini will be stored in a geographically distributed cold storage system. User security to Gemini is further bolstered through the mandatory use of two-factor authentication technology for users when employing the Gemini platform.
“Gemini is simple and easy-to-use for a first-time Bitcoin buyer while at the same time powerful enough and feature-complete for a professional trader,” Tyler Winklevoss said.
Sean Michael Kerner is a senior editor at eWEEK and InternetNews.com. Follow him on Twitter @TechJournalist.