Gemini clarifies that they have no exposure to FTX and reiterates that client funds are properly supported – DiarioBitcoin

By Angel DiMatteo @shadowargel

After the events that occurred with FTX and the effort of the exchanges to transmit greater transparency, the Gemini team did the same and reported that they do not engage in any type of practice that puts user funds at risk. He assured that the assets are backed in a 1:1 ratio.

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  • gemini reiterates that it has no exposure to FTX, FTT or Alameda Research
  • They ensure that client funds are backed 1:1
  • They reiterate that they are a exchange heavily regulated and act in compliance with the laws

gemini, The US-based international exchange, led by the Winklevoss brothers, assured that user funds remain safe, are duly supported and that they do not engage in any type of practice that puts their clients’ assets at risk.

The clarification came to place in an email sent by the team of gemini to its users today, to which DailyBitcoin had access. In the document, the main executives share some interesting facts about the operations of the exchange and reject the actions incurred by the team of FTX, alleging that they follow a completely different model in which they value the security of users.

In this regard, the document opens with the following statement:

Since day one, Gemini has prioritized the security of client assets. We have never made and will never make concessions on that point. As the crypto ecosystem transitions from infancy to adolescence, we are more certain than ever that asking for permission, not asking for forgiveness, will continue to be the central pillar of how we run our business.

And they add:

It’s been a tough couple of days for our industry. Our hearts go out to all those affected by the recent events with FTX. We are all working together to build a brighter future, and moments like these are very painful.

No exposure to FTX / Funds duly supported

Regarding what happened with FTX and its associated companies, the team of gemini reported that the exchange will not be affected after what happened, since the responsible company has no exposure to the companies run by Sam Bankman-Fried (FTX / FTX.US / Alameda Research) nor with the token FTT.

Regarding user funds, managers indicated that gemini is a full reserve exchange and custodian, so client assets “backed at a 1:1 ratio and available for withdrawal at any time”.

Continuing with this idea, on the fiat funds of the clients it is read:

Gemini maintains clients’ fiat funds in accounts separate from business, operating and reserve bank accounts established specifically for the benefit of clients… We do nothing with your fiat funds unless explicitly authorized and directed by you.

The same clarification also applies to users’ cryptocurrencies, which are duly separated from the assets of gemini and remain intact until clients make requests. For both fiat and crypto, gemini He ratified that it is his duty to maintain the capital of excess customer deposits, and to inform the regulators accordingly if there is any change in this regard.

Complying with regulations

Another aspect on which gemini referred to had to do with its status as a highly regulated exchange, a path that it has decided to follow to adapt its operations to the legal rulings applicable in each of the jurisdictions in which they operate. They acknowledge that it is a difficult path, but confirm that it is the right thing to do for the type of service they offer to clients.

Regarding the licenses it has, the team of gemini commented:

Gemini holds many licenses worldwide, including a… New York trust, state money transmission licenses (or legal equivalents), an e-money license from the UK Financial Conduct Authority, a electronic money from the Central Bank of Ireland, and more.

To operate pursuant to the aforementioned licenses, the exchange must undergo annual audits of all its financial statements, so they are also subject to bank evaluations carried out by the New York Department of Financial Services (NYDFS) and other regulators.

Finally, gemini highlighted that they acquired their first Bitcoin in Mt Gox, Therefore, all the experience accumulated after operating under these conditions marked the way forward to do things in the best possible way.

Emphasis on security and transparency

The message of gemini comes to place in the midst of a quite shaken context after what happened with FTX, exchange that was led by Sam Bankman-Fried, whose mismanagement of user funds led to a liquidity crisis that led to the cessation of operations, as well as the opening of investigations by regulators in a large number of countries.

Given this dark outlook for the market, several exchanges have done the same and published information about their reserves / financial management.

entities like Binance Y crypto.com published reports on the balance of their reserves, emphasizing the 1:1 support of client funds.

For his part, coinbase and many others clarified that they had no exposure to the token FTT and/or companies from the ecosystem of FTX, ratifying that the fall of the exchange does not compromise its operations in any way.


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Article by Angel Di Matteo / DailyBitcoin

Picture of Unsplash

WARNING: This is an informative article. DiarioBitcoin is a communication medium, it does not promote, endorse or recommend any investment in particular. It is worth noting that investments in crypto assets are not regulated in some countries. They may not be appropriate for retail investors, as the entire amount invested could be lost. Check the laws of your country before investing.



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Gemini clarifies that they have no exposure to FTX and reiterates that client funds are properly supported – DiarioBitcoin


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