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CoinIQ

Gemini Review: Winklevoss Twins Seek to Legitimize Cryptocurrency

Gemini in Brief

With features like block trading, fee discounts for high volume traders and advanced order types, Gemini caters to hedge funds and professional Wall Street investors. In order to establish their exchange as legitimate and safe, the Winklevoss twins have recruited big names like Ash Kalb, Michael Breu and Cem Paya. The fact that Gemini is one of the few exchanges that has obtained a NYC Bitlicence gives it additional prestige. 

Gemini’s main downside is that it does not allow margin trading and only supports USD, Bitcoin and Ethereum. In addition, Gemini does not accept credit/debit card purchases. Because of these downsides, cryptocurrency enthusiasts interested in buying altcoins and newbies that are interested in making small cryptocurrency investments may find Gemini to be somewhat limiting. 

Pros

  • NYSDFS compliance.
  • Experienced leadership.
  • Easy-to-use interface.
  • Low fees.
  • Accepts ACH bank transfers.

Cons

  • Only available in some US states
  • Limited international availability
  • No support for euros and other non-USD fiat currencies
  • Digital coin support limited to Bitcoin and Ethereum
  • Account creation can take several weeks.

Keep reading our detailed Gemini review to find out whether or not it is the right place for your virtual currency trades.

What is Gemini?

Gemini is a relatively new digital currency exchange that opened its doors in 2015. Despite its newcomer status, Gemini is seen as one of the most legitimate digital exchanges on the market. One reason for this perception could be the fact that the exchange is headed by a pair of experienced, pro-regulation Co-CEOs: the Winklevoss twins. The Winklevoss twins created one of the very first web 2.0 platforms, a Facebook-like social network called ConnectU.

Along with its high profile leaders, Gemini is also well-known for being one of the few digital currency exchanges that’s licensed to operate in New York City. Because Gemini obtained a New York City Bitlicense, it must meet all the capitalization, compliance, anti-money laundering, consumer protection, and cybersecurity requirements as set forth by the NYSDFS.

The main complaint about Gemini seems to be the long wait time involved with opening an account. Other exchanges accept new members after one or two days, but applying to Gemini sometimes takes a week or more. Aside from that, user reviews of Gemini are mostly positive.

History

Gemini founders Cameron and Tyler Winklevoss first rose to prominence in Silicon Valley when they contributed to the development of the web 2.0 internet revolution of the early 2000s. Together, they founded HarvardConnection (later rebranded to ConnectU)– a Facebook-like early social media network that let its users find and add friends, exchange messages and create custom public profiles.

In addition to contributing to the development of web 2.0, the Winklevoss twins were involved in the very first digital currency exchanges. The Winklevoss twins invested 1.5 million dollars in BitInstant. However, they lost that investment when the BitInstant CEO was charged with money laundering and the company was forced to shut down in 2014. That same year, Mt. Gox — another major bitcoin exchange — went bankrupt after hackers stole $460 million in bitcoin from its systems.

Because Gemini meets NYSDFS regulatory requirements and is more secure than the first digital currency ventures, Gemini bills itself a “next generation” digital currency exchange. The Winklevoss twins have invested heavily in advanced security technologies. Some funds are held in a “Hot Wallet” environment, which is hosted on AWS (Amazon Web Services) and complies with the federal government’s level 2 security standards. Gemini’s proprietary “Cold Storage” is even more secure and is certified for level 3.

So far, the response to the Winklevoss twins’ new approach to digital currency has been overwhelmingly positive. Wired has described Gemini as a “grown-up” digital currency exchange. BlockTower Capital hedge fund manager Ari Paul has said that Gemini is one of the few exchanges he trusts. Cboe Global Markets uses Gemini and other exchanges to determine Bitcoin futures.

In Gemini’s early days, it did experience growing pains. After adopting Ethereum in the summer of 2016, Gemini had to temporary disable all deposits and withdrawals. Gemini users encountered error messages again after the exchange exceeded its Amazon Web Services (AWS) usage quota a few weeks later. However, Gemini was quick to fix these problems and provide its customers detailed information about what was going on via the Gemini blog.

Leadership and investors

The Winklevoss twins lend this exchange media visibility and experienced leadership. Source: ABC
  • Cameron Winklevoss – Co-founder, President. Cameron and his brother Tyler gained media attention when they successfully sued Facebook in 2004. They claimed that Facebook founder Mark Zuckerberg stole their idea to create a social media website. Both twins represent the exchange in the media.
  • Tyler Winklevoss – Co-founder, CEO. Before becoming entrepreneurs, Tyler and Cameron were both Olympic rowers. They competed in the 2008 Olympic games.
  • Ash Kalb – Board Member. Kalb is involved with many different technology companies. In 2012, he founded White Ops– a cyber-security company that specializes in stopping ad fraud, credential stuffing, and fake engagement and other automated threats. He’s also a board member of the health technology company Sherpaa as well as Symmetry Labs, a high tech design studio.
  • Michael Breu – Chief Compliance Officer. Breu gained financial world experience at hedge fund giant Bridgewater Associates, where headed up the information security and research department. Before that, he was a Software Development Security Consultant  at Wells Fargo bank.
  • Cem Paya – Chief Security Officer. Paya was a Security Manager and Program Manager at Microsoft before he became an Information Security Engineer at Google.

Gemini is a privately owned company. It is entirely funded by the Winklevoss twins’ investment firm, Winklevoss Capital.

Asset protection

Legal and regulatory compliance

As mentioned above, Gemini is headquartered in NYC. Gemini is BitLicense certified and it also meets all of the NYSDFS’s capitalization, compliance, anti-money laundering, consumer protection, and cybersecurity requirements.

In addition, Gemini also has an Information Sharing Agreement with the Cboe Futures Exchange (CFE). The CFE performs cross-market surveillance of Gemini’s marketplace. In other words, the CFE monitors the Gemini marketplace for signs of volatility. The CFE provides a way for investors to diversify a portfolio and mitigate risk.

Though there aren’t any SROs (Self-Regulatory Organizations) that monitor digital currency exchanges, the Winklevoss twins are working to change that. They recently submitted a proposal to create an industry-sponsored self-regulatory body that would police the entire cryptocurrency market.

Gemini’s Chief Compliance Officer Michael Breu was the head of information security at hedge fund giant Bridgewater Associates. He works with Gemini’s Chief Security Officer Cem Paya. Paya held the same position at AirBnB.

Gemini’s self-governance policies are designed to ensure that Gemini doesn’t become corrupt or allow criminals to use the exchange to launder money. Breu and Paya work together to make sure that Gemini follows the rules set forth in its own Anti-money Laundering Program (AML) and Bank Secrecy Act (BSA). Gemini’s self-governance team files suspicious activity reports (SARs), maintains comprehensive records and perform other financial governance functions to guard against fraud and spot money laundering activity.

Coin listing policies

Currently, Gemini only lists two kinds of digital currencies: Ethereum and Bitcoin.

Network security

Gemini requires 2FA (Two-factor Authentication) for logins and during important transactions, like withdrawals and deposits. Passwords and other sensitive information are protected with HTTPS and other cutting-edge encryption technologies, including HTST (HTTP Strict Transfer Security). HTST was developed in 2010 and is designed to guard against advanced “man-in-the-middle” hacks. Login rate limits prevent “brute force” hacking attempts. In addition, critical parts of the Gemini website’s administration interface are not exposed to the public internet.

The majority of Gemini’s digital assets are held in Gemini’s “cold” (offline) vaulted storage system. These assets are protected by level 3 compliant security measures. Typical level 3 security devices automatically render sensitive information inaccessible if the security of the unit is compromised.

Only a small portion of Gemini’s digital assets are held in its “hot” online wallet. Gemini’s online wallet is level 2 compliant, which means that all authentication data is contained inside tamper-evident seals or protected inside of pick-resistant locks.

Customer Support

Gemini has a detailed but jargon-heavy set of knowledge base articles, a help desk ticketing system and it also offers email support. Phone support is not available.

Reputation

The most common complaints about Gemini are the extended amount of time that Gemini requires to process new users. Some Gemini users claim that they had to wait weeks for approval, but others say they were approved after 1 or 2 days.

How to Join Gemini?

Who can join?

Gemini is available in 46 U.S. states, Washington D.C., Puerto Rico, Canada, Hong Kong, Singapore, South Korea and the U.K.

Unlike most digital currency exchanges, Gemini does do business in New York. Gemini was one of the first exchanges to get a BitLicense— New York’s controversial digital currency regulatory certificate.

Verification

Individual accounts

Gemini’s account creation process is fairly straightforward. Individuals can begin the process by clicking Open a Personal Account on the Gemini webpage. After providing the usual account creation information (full name, email address, password), the webpage will send an email verification code.

Once the email address is verified, individuals must submit four additional pieces of information: a cell phone (for 2FA authentication), bank account information, proof of identity and proof of address.

The amount of time required for final approval can vary. Some Gemini users got approved in just a few days, but others reported that it took several weeks for Gemini to process their application.

Business accounts

Businesses and institutions must go through an entirely separate account verification process if they want to open a Gemini account.

Though the institution account approval process can be initiated through the website, institutions must also submit to an interview with one of Gemini’s client relations staff members.

Businesses get higher trading limits, access to Gemini’s API, segregated custodial accounts and other benefits.

What You Can Trade on Gemini

Cryptocurrencies

Currently, Gemini only supports Ethereum and Bitcoin.

Fiat currencies

The US dollar is the only fiat currency that Gemini accepts.

Currency exchanges

Gemini lets its users buy digital currency with USD. In addition, Gemini users can exchange Ethereum for Bitcoin and vice versa.

Advanced trading

Gemini allows several different order types, including: market, limit, limit IOC (immediate-or-cancel), limit MOC (maker-or-cancel) and limit AO (auction-only). Margin trading is not supported.

In April of 2018, Gemini went live with a new advanced trading feature for Bitcoin and Ether called block trading. Block trading allows Gemini customers to make high volume trades that don’t appear in Gemini’s order book until they’ve been filled. This delay prevents large orders from having immediate effects on the price of Bitcoin and Ether.

Because the minimum threshold for block trading is set at 10 Bitcoin and 100 Ether, the new block trading feature mainly benefits hedge funds and other professional traders. When block trading is not available, these traders have to use over-the-counter trades to prevent large orders form affecting market prices. Large orders can affect the market in ways that hurt the parties involved in a large exchange.

Trading Tools and Fees

Gemini trading platform

Gemini’s interface is logical, but also somewhat technical compared to other digital exchanges.

2FA is mandatory. You can’t set up an account if you don’t have a phone that can accept text messages.

You must complete the 2FA setup wizard before you can access Gemini’s trading interface. Source: CoinIQ

The dashboard displays your current account balance.

Source: CoinIQ

The withdraw part of the interface allows you to choose USD, BTC or ETC. Your asset balances are displayed on the right part of the screen.

Source: CoinIQ

The deposit interface is also fairly intuitive.

Source: CoinIQ

The transaction history page lets you download information about all the trades you’ve placed.

Source: CoinIQ

Gemini apps

Gemini does not have any apps. A knowledge base article simply says that Gemini “does not offer an app at this time.”

Deposits and withdrawals

Fiat currencies

Gemini only accepts wire transfers and ACH deposits and withdrawals. The only fiat currency that Gemini supports is USD. There are no deposit or withdrawal fees.

Digital currencies

Because Gemini hosts its own digital wallet service, you can deposit digital currencies via QR code. Bitcoin/Ether addresses are available as well. There are no deposit fees and withdrawals are free if you make 10 or less withdrawals per month.

  • Bitcoin (10+ withdrawals per calendar month) – 0.002 BTC
  • Ether (10+ withdrawals per calendar month) – 0.001 ETH

Transaction fees

Gemini’s transaction fees are linked to your trading volume.

Additionally, the fee structure rewards trades that add rather than take away from the exchange’s liquidity.

Gemini offers fee discounts to high volume traders. Source: Gemini

Final word

Out of all the digital currency exchanges on the market today, Gemini seems to be one of the most legitimate options out there. Though the Winklevoss twins lost some money in the early days of Bitcoin because they invested in BitInstant, their new project seems to be built on a more solid foundation. In addition, each leader at Gemini has an impressive resume. Kalb, Breu and Paya bring decades of finance and information security experience to the table. Other exchanges are run by people with much less experience.

For new traders

Beginners who just want to invest in digital currency may be put off by Gemini’s technical interface. In addition, Gemini’s knowledge base is jargon-heavy. The lack of phone support is also a potential issue for digital currency newbies. 

For advanced traders

Though Gemini is one of the few  US-based digital currency exchanges that offers advanced order types, the fact that Gemini doesn’t issue 1099-B tax forms means that you’ll have to do your own tax paperwork if you sign up for this exchange. That could get complicated, especially if you plan on doing a lot of trading. Though those issues may deter day traders, Gemini’s advanced security system, continuous effort to comply with regulatory standards and its new block trading feature makes this exchange an attractive choice for institutions and hedge funds. In addition, Gemini’s fees are very low compared to other digital exchanges.

Alex Munkachy

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