This license is different than the BitLicense, which is more of a business license for those that process bitcoin transactions. For bitcoin exchanges, the regulatory pressures are a bit different. Now, however, with its new license under its belt, Gemini is able to operate as a chartered limited liability trust company.
Trading across the bitcoin exchange officially begins on Thursday, Oct. 8, at 9:30 a.m. EDT.
In a blog post announcing the opening, Cameron Winklevoss posted a note on behalf of himself and his brother, Tyler, about what the company has been working on leading up to the launch, and what’s next for the bitcoin exchange. His blog post focused on four big keywords: product, security, licensing and compliance.
“As a bitcoin exchange we don’t always have the ability to ‘fail fast’ or the freedom to ‘hack’ our way through product development, security or licensing. When you are dealing with money — especially other people’s money — you simply cannot assemble the rocket ship mid-flight,” he wrote.
“Meeting the high-water mark of banking compliance is no small task, especially for a startup, but we felt that doing so was crucial — bitcoin is an island right now, and, if we are going to build a bridge to the financial mainland, then Gemini must look and feel as safe, secure and compliant as any other top tier financial institution in the world. This includes, among other things, creating a robust anti-money laundering (AML) program, strong internal controls and procedures, a comprehensive security program, and maintaining significant capital reserves,” he continued. “In short, we take licensing and compliance very seriously and think that asking for permission, rather than forgiveness is the right approach in this case — and we think our customers will agree.”
The regulation aspect for the company is key, particularly as the bitcoin community works to wade through the negative connotations that many bitcoin exchanges have had to overcome. Getting banking approval, it seems, is the first step for the digital currency ecosystem to gain a spot in the mainstream financial world.
As Winklevoss highlighted, security will be at top of mind for the company as the bitcoin on its network will be stored in a proprietary, multi-signature, geographically distributed cold storage system. Their records will also be subject to inspection by the New York State Department of Financial Services as part of having the license.
With this news, Gemini Trust Company, LLC, is officially a New York state limited liability trust company, which — under New York banking laws — allows the company to accept both individual and institutional customers. Gemini will first operate in 26 U.S. states, plus Washington, D.C., but it also has expansion plans sketched out.
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