Tyler Winklevoss and Cameron Winklevoss aka Bitcoin billionaire brothers, founders of Gemini, the leading cryptocurrency exchange in the space, spoke about the progress of their Bitcoin ETF, in an interview with Fortune Ledger. They also elucidated on the U.S Securities and Exchange Commission [SEC]’s main concerns with respect to the exchange-traded fund.
In July 2018, the commission rejected the approval of a proposed rule change made by the Winklevoss brothers under the grounds of market manipulation and lack of market surveillance. This was notably the second time the regulatory body rejected an exchange-traded fund proposed by the Winklevoss brothers.
However, the rejection of the ETF resulted in the commission facing criticism, including one from their own commissioners’, Hester Peirce. The commissioner published a dissent on the SEC ruling, stating that the proposed rule change had all the pre-requisites required for the approval of a rule change. Succeeding this, news soon broke out that Gemini will be opting for market surveillance services offered by Nasdaq, second-largest stock exchange in the world.
Cameron stated that the timeframe of when the space will see an approved Bitcoin ETF by the commission is “hard to predict”. He added that the team has been working on the ETF for over six years now and that they will continue working towards it even if it takes them six more years. He said:
“We understand the commission’s concerns. We’ve heard them loud and clear and they are basically calling for more market surveillance and protections in the marketplace to avoid, prevent against manipulative behaviour and stuff like that. So, Gemini has build a market surveillance team.”
Cameron further stated that Gemini is also working on the Virtual Commodity Association, a self-regulatory organization for the US cryptocurrency industry. He stated that they are working on this with an aim to get exchanges under the same roof and share information in order to “build integrity into the marketplace”, one of the main concerns with an ETF product. He added:
“We get the commission being conservative on that, that makes a lot of sense because this will be the first of many products of its kind. So, we’ve gotta get it right. So, we’re willing to accept the fact that we gotta do out homework.”
He also spoke about the commission pointing out the lack of liquidity available in the cryptocurrency space, and the market being very vulnerable to market manipulation. Here, Cameron stated that the cryptocurrency is, in fact, “quite liquid“, adding that the main concern was the derivatives market is still very nascent and that it has to still grow for price discovery. He said:
“But it also goes back to marketplace surveillance. That’s really the key bringing the tools an the surveillance in monitoring and the equities market that the commission is very familiar with to virtual currency marketplaces and enough. Gemini can’t be doing it by ourselves. […] We’re using NASDAQ’s smart surveillance, but we can’t do it ourselves.”
This was followed by the Founder stating that Gemini needs other industry players to help out in their quest and that this is what the SRO is working towards achieving.