Tyler and Cameron Winklevoss aren’t licking their wounds after the Securities and Exchange Commission rejected their proposal for a Bitcoin-based exchange-traded fund last week for a second time.
While demand has waned amid this year’s plunge in the value of digital currencies and the reluctance exhibited by U.S. regulators, the twin brothers who operate the Gemini Trust Co. exchange say they’re continuing to grow the business even though most large Wall Street investors aren’t on board yet.
“Wall Street is taking cryptocurrencies seriously, however, the vast majority of Wall Street firms are still not participating in the cryptocurrency market, which remains primarily a retail driven market,” said Tyler Winklevoss, who serves as chief executive of Gemini. “This will change over time, but it will take time."
Many institutional investors are likely to stay on the sidelines until regulators including the SEC clarify their position on key questions involving coins, and allow additional financial instruments to enter the market. Gemini and Cboe Global Markets Inc. launched Bitcoin futures contracts late last year and worked together on the fund proposal. An ETF approval would have opened the volatile cryptocurrency market up to pension funds and other large investors.
Even though Gemini offers services such as custody to institutional investors, it’s currently focused on growing its retail business by adding additional cryptocurrencies, Tyler Winklevoss said during an interview at the company’s Portland office, which has about 20 employees. The facility, which is also home to a three-legged dog, is located in a former government building that features wide marble staircases and the usual Millennial amenities, such as a ping-pong table.
In the past six months, Gemini doubled its total worldwide staff to 150, and it plans to double it again by year-end, Tyler Winklevoss said. In July, the company brought in Robert Cornish, who used to be chief information officer of the New York Stock Exchange, as the company’s first chief technology officer.
To pave the way to greater adoption down the road, the Winklevoss twins submitted a proposal in March to create the Virtual Commodity Association, a self-regulatory organization that would police digital-currency markets and custodians. The non-profit group wants to develop industry standards, promote transparency and work with regulators like the U.S. Commodity Futures Trading Commission to prevent fraud.
This article was provided by Bloomberg News.
