Winklevoss Twins Win Approval to Open Bitcoin Exchange

The twins, famous from their legal battles with Facebook's co-founder Mark Zuckerberg, announced on Monday that they had received approval for their exchange from the New York State Department of Financial Services, the state's top financial regulator.

The agency, which has taken the lead in regulating the new virtual currency industry, had already approved another company, ItBit, to operate under a similar regulatory framework as a banklike trust company.

The Winklevoss twins have been working on their exchange for more than a year, with help from veterans of other large technology companies. Gemini will hold customer money in federally insured bank accounts. The exchange aims to make it easier for large institutional investors to buy and sell Bitcoin.

Wall Street banks have recently been expressing growing interest in harnessing the technology underlying Bitcoin. But it is still unclear whether they and other large financial players will want to trade Bitcoin itself, as the Winklevoss twins are betting. Much of the interest from Wall Street is in the technology that allows direct digital transactions.

The price of Bitcoin has been largely stagnant for most of this year and sits around $240 for a Bitcoin. ItBit, the other exchange, has not experienced outsize trade volumes so far.

The Winklevoss twins have been actively working with Bitcoin since 2012. The first company they backed, BitInstant, did not survive. They quickly began working on a Bitcoin-backed exchange-traded fund, which is expected to trade on the Nasdaq exchange. That fund is still waiting for regulatory approval.

The twins have been vocal about the importance of working with regulators, rather than challenging the authorities, as some Bitcoin advocates have wanted to do.

"Bitcoin is an island right now, and Gemini is building a bridge to the financial mainland," Tyler Winklevoss, the chief executive of Gemini, said in a statement on Monday. "Gemini is simple and easy-to-use for a first-time Bitcoin buyer while at the same time powerful enough and feature-complete for a professional trader."

© 2015 New York Times News Service