Cryptocurrency exchange Gemini has received approval from the Commodity Futures Trading Commission to operate as a Derivatives Clearing Organization (DCO). This license allows the company to clear its own prediction market and derivatives trades, paving the way for expansion into products like perpetual futures. The approval arrives amid a strategic pivot toward prediction markets and ongoing legal challenges, including a $1.2 billion lawsuit from New York.
Gemini announced Thursday it has received approval for a key license from the CFTC, allowing it to act as a clearinghouse for its derivatives-related business. The DCO license will enable the company to settle prediction market wagers and other derivatives trades in-house.
This control grants the company greater ability to shape its offerings and potentially expand into more complex products like perpetual futures. Co-founder Cameron Winklevoss stated on X, *”Gemini now has a full-stack, end-to-end marketplace for predictions as well as futures, options, and more.”*
Gemini is not the first crypto-focused company to obtain a DCO, as Crypto.com received approval last fall and Kraken’s parent company moved to acquire Bitnomial earlier this month. There are now only 22 companies in the United States with DCO approval.
The company said earlier this year it would increase its focus on prediction markets after laying off more than a quarter of its staff. Gemini has since faced a class-action lawsuit regarding the shift and was sued by New York for $1.2 billion over alleged violation of state gambling laws.
The New York suit was quickly countered by the CFTC, which argues prediction market platforms fall exclusively under its federal jurisdiction. Gemini (GEMI) shares jumped more than 6% Thursday, though they are still down over 55% since the start of the year.
