They may face regulatory hurdles, but the Winklevoss twins are pressing ahead with their ETF plans. The latest proof of their intentions comes in the form of a patent that was awarded to them recently. The patent describes a method for settlement in exchange-traded products (ETPs) involving cryptocurrencies. It names bitcoin, ethereum and dogecoin, among others, as coins that could be used in the system. It also outlines a method for generating private keys for use on the platform.
Tyler and Cameron Winklevoss are among earliest investors in cryptocurrencies and were the first bitcoin billionaires. They launched the Gemini cryptocurrency exchange in 2015 and have been lobbying the SEC for permission to allow crypto ETFs in the market. However, their efforts have been unsuccessful. In a letter earlier this year, the regulatory agency outlined its concerns relating to crypto ETFs. These concerns ranged from the absence of regulation in underlying cryptocurrency exchanges to valuation methods used for cryptocurrencies. (See also: Why the Winklevoss Twins New Bitcoin ETF Matters.)
Winklevoss Twins Seek to Establish Crypto Exchanges
The Winklevoss twins have spearheaded a move for cryptocurrency exchanges in North America to self-regulate their operations. Recent reports have suggested that Coinbase, North America’s largest cryptocurrency exchange, might have filed with the SEC to operate as a brokerage. Gemini is regulated by the New York Department of Financial Services.
News of the patent award is further proof that institutional capital may finally be making its way to cryptocurrencies. Goldman Sachs Group Inc. (GS) has already confirmed its plans for bitcoin trading, and the Intercontinental Exchange (ICE), parent to NYSE, is said to be developing a bitcoin exchange to allow large traders to hold bitcoin. Institutional investors are expected to play a significant role in stemming volatility and bringing stability to cryptocurrency markets. (See also: How Goldman's Bitcoin Bid Could Change the Crypto Industry.)
Investing in cryptocurrencies and other Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns 0.01 bitcoin.