Gemini Gets Key CFTC Sign-Off as Firm Eyes Prediction Market
TL;DR
Gemini received CFTC approval for a derivatives exchange, enabling it to enter prediction markets and expand crypto offerings. The move signals growth in crypto-native firms bridging digital assets and event contracts.
Key Takeaways
- •Gemini's derivatives exchange application was approved by the CFTC, allowing entry into prediction markets.
- •The company plans to offer event contracts and explore crypto futures, options, and perpetual contracts for US customers.
- •Shares surged 28% after the approval, highlighting market optimism about Gemini's expansion.
- •The approval reflects CFTC Acting Chairman Caroline Pham's support for digital assets, with Tyler Winklevoss joining an innovation council.
- •Prediction markets face legal uncertainty but attract growing interest from firms like Gemini and Polymarket.
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Gemini Space Station Inc.’s application for a derivatives exchange was approved by the Commodity Futures Trading Commission Wednesday, in a move that will allow the company to join the fast-growing field of prediction markets.
Gemini, co-founded by billionaire twin brothers Tyler and Cameron Winklevoss, will soon allow existing US customers to trade event contracts on its website and mobile app, the company said in a blog post. In a regulatory filing prior to its initial public offering, the firm included prediction markets on “economic, financial, political and sports forecasts” among the list of products it was interested in trading.
Gemini “will explore expanding its derivatives offering for US customers to include crypto futures, options, and perpetual contracts,” the company said. So-called perps are a popular product already widely traded on overseas exchanges. Similar products are gaining traction on US-based crypto exchanges.
Shares of Gemini surged as much as 28% in extended trading after the company confirmed receiving a designated contract market license.
Gemini’s planned derivatives launch will expand the number of crypto-native firms, such as Polymarket, straddling both digital assets and prediction markets. Many firms have expressed interest in the nascent industry, despite legal uncertainty swirling around them due to the growth in sports-related derivatives contracts.
Read More: Winklevoss-Founded Gemini Moves to Enter Prediction Markets
Gemini applied for CFTC approval in May to operate a designated contract market. It typically takes more than a year to get agency sign-off to launch a derivatives exchange.
A representative for the CFTC declined to comment. A spokesperson for Gemini didn’t immediately respond to a request for comment.
The approval is one of the latest agency actions under the leadership of Acting Chairman Caroline Pham, who has positioned herself as a champion of the digital assets industry and taken numerous steps to advance crypto trading on CFTC-regulated platforms.
Pham also announced Wednesday that Tyler Winklevoss would be a participant in the agency’s CEO Innovation Council. The group will include Polymarket founder Shayne Coplan, CME Group Inc. chairman and CEO Terry Duffy and Kalshi co-founder Tarek Mansour, among others.
Pham is expected to depart the agency soon if Michael Selig, President Donald Trump’s second nominee for CFTC chair, is confirmed by the Senate.
Winklevoss made waves in the crypto and derivatives world earlier this year for criticizing Brian Quintenz, Trump’s first nominee to permanently lead the regulator. Quintenz sits on the board for Kalshi Inc., one of the most popular prediction markets regulated by the agency.
Winklevoss called the White House shortly before a Senate panel was set to vote on the nomination and asked to delay the process, Bloomberg News reported. Quintenz’s nomination was pulled in September.