Gemini Exchange Bags Major CFTC License For Derivatives Trading

Cryptocurrency exchange Gemini has taken another major step in the US regulatory. The Commodity Futures Trading Commission (CFTC) authorized Gemini to operate as a Derivatives Clearing Organization (DCO). The exchange now wants to expand its footprint in the area of derivatives and prediction markets.

Gemini Exchange Gets Key CFTC License

The approval allows Gemini exchange to clear trades associated with derivatives products, such as prediction markets, in-house rather than through clearinghouses. This allows it to manage the settlement and risk of the trades and products it offers, rather than relying on a clearing house.

It also allows the exchange to expand its offerings to derivatives futures trading products. Co-founder Cameron Winklevoss wrote, “We are excited to announce that Gemini has received a Derivatives Clearing Organization (DCO) license from the CFTC. This license allows us to act as a clearinghouse for regulated derivatives trading, including prediction markets.”

The licence comes on top of previous advances in Gemini’s regulatory journey. The crypto exchange has previously received approval to operate a Designated Contract Market. This enabling it to launch its prediction platform. With the DCO approval, Gemini exchange can now clear trades made on that platform through its own platform.

Winklevoss added, “Gemini now has a full-stack, end-to-end marketplace for predictions as well as futures, options, and more.” He also said it is “a major building block for our super app, where users will be able to fulfill their existing and future financial needs all in one place.”

What Other Companies Hold This License?

Gemini exchange is one of the 22 companies in the U.S. with this status, which shows the rarity of the approval. Others in the field have also sought to obtain this ability. Kalshi secured its license some time ago, and Crypto.com and Polymarket have used similar tactics to gain approval and acquire firms.

In contrast, Kraken took a different route altogether. After gaining $200 million funding from Deutsche Borse, it is eyeing to gain a foothold in clearing space by purchasing a company that holds the license, Bitnomial.