The cryptocurrency exchange Gemini announced on Thursday that it has obtained a key license from the U.S. Commodity Futures Trading Commission (CFTC), allowing the company to act as a clearinghouse for its derivatives-related business.
This license permits Gemini to operate as a Derivatives Clearing Organization (DCO), enabling it to settle prediction market bets and other derivatives trades internally without relying on authorized third parties.
This control will give the company greater ability to shape its products and potentially expand into more complex areas, such as perpetual futures, which allow for higher-risk bets on assets without a settlement date.
“Gemini now has a full-stack, end-to-end market offering services such as predictions, futures, and options,” said company co-founder Cameron Winklevoss in a blog post on Thursday.X.
“This is also a key component of our super app, where users can meet all their current and future financial needs in one place,” he continued.
Gemini is not the first cryptocurrency or prediction market company to obtain a DCO. The prediction market giant Kalshi has held a DCO since 2024; its competitor Polymarket has also obtained a DCO. Obtained a company received a DCO last summer; Crypto.com also received approval in the fall to apply for a driver’s license.
At the beginning of this month, Kraken, the cryptocurrency exchange, moved its parent company to acquire Bitnomial, a company that already holds a DCO, for $550 million.
Following Gemini's official approval yesterday, only 22 companies in the U.S. have received DCO approval. This number highlights the relative scarcity of such licenses and indicates that companies focused on prediction markets are rapidly dominating the larger derivatives market under CFTC regulation.
Earlier this year, Gemini stated it would increase its focus on prediction markets. layoffs The company cut more than a quarter of its workforce and completely exited the European and Australian markets. Since then, the company has faced... a class-action lawsuit regarding this shift, and was sued earlier this month, when New York State imposed a $1.2 billion fine for alleged violations of state gambling laws.
The lawsuit in New York was quickly dismissed. Counterclaim The U.S. Commodity Futures Trading Commission (CFTC) argued that prediction market platforms like Gemini cannot be regulated under state gambling laws and must be solely under federal regulatory authority.
Since Thursday’s open, Gemini (GEMI) stock has risen over 6%, recently trading at $4.40. Over the past month, the stock has rebounded 9%, but it remains down more than 55% year-to-date.