Gemini, Coinbase and Kraken embrace regulation to beat Binance’s dominance

Gemini, the crypto exchange of Cameron and Tyler Winklevoss, plans to surpass Binance and become the largest crypto exchange by volume, despite Binance’s daily spot trading volume exceeding  Gemini’s by over 100 times. However, given the recent regulatory scrutiny against Binance, embracing regulation could give a competitive advantage to rival exchanges.

As Bloomberg reported, Gemini exchange co-founder Cameron Winklevoss has stated that the company expects to overtake Binance, the current largest crypto exchange by volume, predicting its compliance will win out, as regulators increasingly cracking down on unregulated exchanges.

He stated that Gemini is “playing the long game,” emphasizing the importance of adhering to regulators’ demands.

“We’re trying to be the fastest tortoise in the race. The long game pays off over time,” Gemini co-founder said.

Winklevoss stated that Gemini has been cooperating with Bitstamp, Bittrex, and bitFlyer USA to clean up the industry and allay the concerns of financial regulators. The firm helped create the Virtual Commodity Association in 2018, which aims to prevent scams and manipulation.

Other major cryptocurrency exchanges, such as Coinbase Global Inc and Kraken, have adopted a closer approach to embracing regulation, too.

Coinbase, ahead of its direct listing on Nasdaq, published its audited financials and hired Melissa Strait of Stripe Inc. as its chief compliance officer. Kraken, another big US-based cryptocurrency exchange, adopted a regulated banking charter in the state of Wyoming, according to its plans to go public next year.

At the time, Binance, which continues to dominate crypto trade volumes, has faced a wave of attacks by financial regulators from different countries in the last few months.

In June, the U.K.’s Financial Conduct Authority (FCA) ordered Binance to stop its operations in the country. A banking blockade followed as several high street banks curtailed their customer’s activities with the exchange.

However, Binance continues to dominate crypto trade volumes with its $13.4 billion in daily trading volume, that more than 100 times bigger than the Winklevoss twins’ exchange, which posted $117.7 million.

Following the rise of the global regulation pressure, Binance CEO Changpeng “CZ” Zhao posted an open letter outlining Binance’s plans regarding the current crypto regulatory landscape, which stated: “Compliance is a journey — especially in new sectors like crypto. The industry still has a lot of uncertainty.” Also, Binance hired Jonathan Farnell, the former eToro Money U.K. director of compliance, to oversee regulatory compliance in Europe.