Gemini Wants to Trade Crypto Securities

The broker-dealer license appeal will be sent to Financial Industry Regulatory Authority, but experts believe the plans implementation can take some time
03 July 2019   930

Gemini Bitcoin Exchange will apply for a broker-dealer license, which will allow it to operate as an alternative trading system and offer clients securities on the blockchain. It is reported by CoinDesk.

The appeal will be sent to the Financial Industry Regulatory Authority (FINRA).

Gemini has previously entered into a partnership with Harbor, a startup specializing in real-world assets tokenization, which gives institutional investors the opportunity to purchase securities using Gemini Dollar (GUSD).

However, now, as source familiar with the operating activities of Gemini said, the exchange plans to launch trading in similar instruments on its own platform. It is assumed that this will be securities from Harbor, as well as from other projects.

Implementation of these plans, however, may take quite a long time, so FINRA is in no hurry to approve applications for obtaining a broker-dealer license from cryptocurrency companies. Currently, the organization is considering about 40 such applications, while some companies have been waiting for 14 months to complete.

In April, Harbor raised $ 28 million in funding from a number of venture capital investors, including Andreessen Horowitz and Pantera Capital. In November of the same year, the company launched a platform for distributing security tokens, starting with the sale of shares in The Hub residential complex in South Carolina.

Fake Trading Share to Reach 68%, - FTX Global

This figure, however, is significantly lower than what Bitwise's report and the discrepancy is explained by the difference in methodology
04 July 2019   897

The exchange of derivatives FTX Global and Alameda Research conducted a study that estimated the volumes of fictitious transactions (wash trades), presumably prevailing in many cryptocurrency exchanges.

The report says that 68.6% of trading volumes displayed by CoinMarketCap are fake. This figure, however, is significantly lower than what Bitwise Asset Management announced in March.

The discrepancy between the results in almost 30% of the authors of the new study is explained by the difference in methodology. So, FTX Global is sure that Bitwise used an too strict approach to data analysis, which is why a significant proportion of real trading volumes fell into the category of fake ones.

While our methods are not foolproof, we believe they paint the most accurate picture of the true nature of cryptocurrency trading volume that anyone has made publicly available as of yet.
 

FTX Global Team

The Alameda methodology involves verifying the authenticity of data on trading volumes on various exchanges based on six different parameters, including manual verification of information and comparison of order books.

FTX Global Website
FTX Global Website

In particular, the experts found out that some sites provided data on the volumes of foreign exchanges for their own, with a slight delay in time. Other platforms used more advanced techniques - for example, they introduced large fake volumes only against the background of many smaller orders, thus trying to hide the true state of affairs.

The main purpose of these tactics is to raise the platform higher in the CoinMarketCap rating, creating a false impression of its liquidity. It also sometimes allows for the ability to charge a higher listing fee.