Gemini, a crypto exchange, has obtained crucial approval from the CFTC on Thursday, enabling it to function as a clearinghouse for its derivatives operations. This license, allowing Gemini to operate as a Derivatives Clearing Organization (DCO), empowers the company to settle prediction market bets and other derivative transactions internally rather than depending on third-party entities.
This newfound control provides Gemini with enhanced capacity to tailor its offerings and potentially diversify into more intricate products like perpetual futures and high-stakes commodity wagers without a fixed end date. Co-founder Cameron Winklevoss announced, “Gemini now boasts an integrated marketplace for predictions, futures, options, among other financial instruments.” He added that this development is pivotal in constructing their super app, designed to meet both current and future financial requirements of users.
Gemini joins the ranks of companies such as Kalshi, which secured a DCO in 2024; Polymarket, which acquired a company with a DCO last summer; and Crypto.com, approved for the license in fall. Recently, Kraken’s parent company announced its intent to acquire Bitnomial—a holder of a DCO—for $550 million.
With Gemini’s approval now finalized, there are 22 entities in the U.S. holding DCO status, underscoring both the exclusivity of such licenses and the burgeoning role of prediction market companies within the broader derivatives landscape governed by the CFTC.
Earlier this year, Gemini had shifted focus towards prediction markets following significant staff reductions and withdrawal from European and Australian markets. The company has since been embroiled in legal challenges including a class-action lawsuit concerning these changes, and faced a $1.2 billion lawsuit from New York over alleged state gambling law breaches. However, the CFTC counter-sued, asserting that prediction market platforms like Gemini fall under federal jurisdiction rather than state gambling laws.
Since Thursday’s opening bell, Gemini’s stock (GEMI) has seen an uptick of over 6%, currently trading at $4.40. Over the past month, shares have risen by 9%, though they remain down more than 55% year-to-date.