CAMERON AND TYLER Winklevoss were among a group of investors who put $1.5 million into BitInstant, a bitcoin exchange founded by a guy named Charlie Shrem. Shrem was also a founding member of The Bitcoin Foundation, the not-for-profit created to oversee the bitcoin digital currency. He’s now in federal prison.
Shrem was sentenced to two years for aiding and abetting the operation of an unlicensed money transmitting business used to launder Silk Road drug money. BitInstant is no more.
But like many people, the Winklevoss twins still believe in bitcoin—strongly. This morning, they unveiled their own bitcoin exchange, dubbed Gemini, after New York’s financial regulator approved the service for use in the state. The exchange will officially open its doors on Thursday morning.
‘You have to get regulation right. You have to have a dialogue.’TYLER WINKLEVOSS
The New York State Department of Financial Services granted Gemini what’s called a limited liability trust charter under New York banking law. In the past, this kind of charter was used to regulate “trust banks” such as State Street and Rockefeller Trust. But the state says it also allows for the operation of a virtual currency exchange, where people can swap dollars and other fiat currencies for bitcoin and vice versa. The state granted a similar charter to another bitcoin exchange, ItBit, this past May.