Gemini secures Derivatives Clearing Organization license as it works toward full CFTC stack

Gemini has received a Derivatives Clearing Organization (DCO) license from the Commodity Futures Trading Commission (CFTC), allowing the crypto exchange to expand its non-spot trading operations, according to an announcement on Thursday.

"Today marks a major milestone in Gemini’s marketplace expansion. In addition to our crypto spot marketplace, Gemini now has a full-stack, end-to-end marketplace for predictions as well as futures, options, and more,” Cameron Winklevoss, president and co-founder of Gemini, said.

Like other U.S. crypto-native exchanges, including Coinbase and Kraken, Gemini has been working to build a so-called "superapp," where users can trade assets beyond tokens. 

As part of this growth strategy, Gemini aims to achieve a full-stack of CFTC licenses, including its Designated Contract Market (DCM) license granted in December. Gemini had initially applied for a DCM license in 2020 and is now using it to house its prediction market and kickstart its futures, options, and perps offerings under its Titan affiliate.

As a DCO, Gemini’s Olympus unit can now act as a clearinghouse, handling settlement, risk management, collateral, and guaranteeing trades on the Titan platform. This means Gemini will not have to rely on third-party clearing, potentially leading to cost reductions. 

Only a few crypto firms have both DCM and DCO licenses in-house, including Bitnomial and Crypto.com. 

Notably, Kraken’s parent company, Payward, announced earlier this month that it has agreed to buy Bitnomial, which was the first crypto-native company to hold the full CFTC stack to operate as a designated contract market, a derivatives clearing organization, and a futures commission merchant. Kraken earlier acquired an existing DCM in October. 

Coinbase is also working to acquire The Clearing Company, which would give the firm a DCO.  

Although not named in the release, Gemini said it is working to secure “a full suite of CFTC derivatives licenses,” suggesting it is looking to acquire or apply as a Futures Commission Merchant (FCM).

Gemini, founded in 2014, went public as Gemini Space Station (GEMI) in September. GEMI stock has slumped, with Gemini reporting net losses close to $600 million last year. The exchange has recently radically reshaped its C-suite, parting ways with three top executives, and pulled out of under-performing markets in the UK, EU, and Australia. 

Earlier this week, Gemini rolled out Agentic Trading, enabling AI users to let their bots operate their trading accounts via an API.