DEFINITION of Gemini Exchange

In the crowded field of digital currency exchanges, a service is only likely to succeed if it can set itself apart from the rest of its competitors. In this way, Gemini Trust Company, also known as the Gemini Exchange, has a distinct advantage. Founded in 2014, Gemini is the brainchild of Cameron and Tyler Winklevoss, the famous investors and early Facebook supporters. Gemini has worked to be at the forefront of the cryptocurrency exchange world, working alongside Nasdaq to revolutionize the way that transactions are monitored and recorded.

BREAKING DOWN Gemini Exchange

The Winklevoss brothers announced the launch of Gemini in early 2014, although the exchange did not go live until October 2015. As of June 2018, Gemini is in operation in the United States, United Kingdom, Canada, Singapore, South Korea and Hong Kong. In only a few years of existence, the exchange has made a priority of expanding across the global digital currency market. As with many other digital currency exchanges, Gemini allows users to buy and sell a variety of digital and fiat currencies on an open market. Users are also able to use Gemini to facilitate transfers of U.S.  dollars to and from bank accounts.

The exchange began to set itself apart in early May 2016, however, when it became the first licensed ethereum exchange in the United States. Later, in May 2018, Gemini became the world's first exchange to be licensed to offer zcash trading as well. This announcement followed a report that Gemini began to offer block trading in April 2018, allowing users to buy and sell large orders of digital currencies outside of Gemini's usual order books. Block trading was implemented in order to create additional liquidity opportunities.

In the past year, Gemini has also worked to expand its partnerships with other organizations and companies. The most notable of these is Gemini's partnership with Nasdaq, announced in April 2018. Through this collaboration, Gemini will utilize Nasdaq's SMARTS technology in order to weed out fraudulent activity and manipulation of digital currency prices. Besides the Nasdaq partnership, Gemini also partnered with Caspian, the digital currency trading and risk-management service.

As with most digital currency exchanges, Gemini has seen its share of issues. In late November 2017, for instance, Gemini crashed for several hours in the wake of unusually high demands on its website. Rival exchange Coinbase also crashed around the same time. In response, Gemini representatives wrote on the company blog to indicate that "this is not the first scaling challenge we've encountered, and it won't be the last," adding that the exchange is "continuing to improve our performance and infrastructure monitoring so we can anticipate potential problems more quickly in the future." Gemini has worked to ensure compliance with federal and state regulations regarding the sale and purchase of digital currencies. As such, the company markets itself as a "New York trust company regulated by the New York State Department of Financial Services."

As of this writing, Gemini offers transactions in bitcoin, ethereum and zcash only. In addition to basic trading services, the exchange also allows for custodian services as well. In the case of user assets, U.S. dollar deposits are held at FDIC-insured banks, while digital assets are primarily stored offline in Gemini's cold storage system, according to the exchange's website.

Investing in cryptocurrencies and 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 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 bitcoin and ripple.