Gemini co-founders Tyler Winklevoss and Cameron Winklevoss attend the company’s IPO on the Nasdaq Marketsite on September 12, 2025 in New York City, USA.
Gina Moon | Reuters
gemini space station has received approval from the U.S. Commodity Futures Trading Commission to operate its own regulated derivatives clearing house. This will allow crypto exchanges to gain a deeper foothold in prediction markets and potentially expand into perpetual futures trading.
This allows Gemini to clear and settle trades in-house, rather than relying on external infrastructure, and gives Gemini more control over the functionality and scale of its prediction market products, especially as it builds towards more complex products like perpetual futures (better known as PERPs).
Shares rose 2.5% in pre-market trading on the news.
“Given the magnitude of the opportunity with prediction markets and future crypto derivatives, owning and operating the market end-to-end is powerful,” Gemini co-founder and president Cameron Winklevoss told CNBC in an exclusive interview. “This allows us to adapt to a fast-paced and changing environment, providing a better experience for our customers and being able to respond more quickly.”
Across the industry, exchanges are turning to products such as event contracts and futures, especially prediction markets, to stabilize revenues that fluctuate with the price of cryptocurrencies.
“We think prediction markets could one day be as big as traditional capital markets,” Winklevoss said. “We are focused on that for the long term, but we intend to expand our derivatives offering in the cryptocurrency space beyond that.”
The approval comes on the heels of a lawsuit filed by New York State Attorney General Letitia James against Gemini and Coinbase earlier this month. He argued that his company’s prediction market products fall under state gaming regulations and should require a license from the New York State Gaming Commission. The CFTC pushed back and sued New York, arguing that prediction markets are subject to federal derivatives law.
Gemini is also facing increased scrutiny from investors following its post-IPO sell-off due to widespread declines in cryptocurrency prices. Shares soared 14% at the start of trading, trading as high as about $45, but have since fallen 90%. Bitcoin has fallen by about 30% during the same period.
Gemini is trading at a 52-week low since its September IPO
“As a crypto-centric business, your destiny is tied to the crypto market to some extent,” he said.
Recent investor skepticism has centered on continued losses, executive departures, withdrawal from international markets, and “corporate transformation” into AI (such as the recent launch of proxy trading) and prediction markets. A class action lawsuit in New York alleges Gemini misled investors about its IPO strategy.
Winklevoss argues that skeptics who dismiss the entry of cryptocurrencies into prediction markets as a short-term gimmick to increase trading volume in a bear market are fundamentally underestimating its potential as a powerful and durable growth engine, adding that any innovation is bound to have its share of detractors and skeptics, just like Bitcoin.
He said: “When you look at prediction markets, it really brings together the wisdom of the crowd and allows people to express their views on major and important macroeconomic events.” “That is here to stay, and being able to gain perspective on the future and what is important in our lives is hugely beneficial.”
Recalibration of virtual currency trading
Spot trading of cryptocurrencies is the lifeblood of platforms like Gemini, but it is highly cyclical, volume-dependent, and largely driven by market sentiment rather than underlying economic activity. On the other hand, derivatives, whether event contracts or PERPs, give companies a path to more continuous engagement.
Gemini began event contracts in December following CFTC approval. Robinhood entered prediction markets last year through a partnership with Kalsi, and Coinbase launched a similar integration in January of this year. Native platforms such as Kalshi and Polymarket remain central players and are looking for a piece of criminal business, as well as cryptocurrency exchanges.
“The crypto industry has created a tremendous amount of new stuff in a short amount of time that has real uses and real value,” Winklevoss said, citing not just Bitcoin itself, but also stablecoins and decentralized financial protocols built on networks like Ethereum and Solana.
“But for a company like Gemini, our goal is to try to deliver as much value to our customers as possible in as little time as possible, and cryptocurrencies are part of that story,” Winklevoss said.
Before focusing on predictions, Gemini expanded its story to credit card offerings and staking, the process of locking up cryptocurrencies to secure blockchain networks and earn rewards in return. Beyond cryptocurrencies, the company also plans to bring stock trading to its platform.
“This should move us from being a solely crypto-focused company to being more market-linked and to some level smooth out our returns,” Winklevoss said. “So if one asset class is underperforming another, we need to smooth it out and provide a more indexed approach to these different asset classes.”
Disclosure: CNBC and Kalsi have a commercial relationship that includes a minority investment in CNBC.
