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October 16, 2018

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Gemini Closes Accounts of Certain OTC Desks

February 6, 2019

 

When you think about Stablecoins, do any issues come to your mind? What is the biggest risk in investing in them? Until today, many people might have found it quite difficult to answer these questions at all. Stablecoins are, of course, supposed to be the least volatile cryptocurrencies by definition.

 

With the news that Gemini recently closed the accounts of two over-the-counter trading desks that it had been doing business with, however, this fact might be about to change. According to CoinDesk, upon receiving the news that one of these groups wanted to trade-in several million Gemini Dollars for true US Dollars, Gemini, which is a highly regulated crypto exchange, shut down the group’s account.

 

This sort of action not only brings into question what sort of legal recourse the business would have in this situation, but also what sort of responsibility the exchange should have in terms of publicly disclosing the reason for closing the account. In this particular case, debating these ideas arguably becomes even more important because Gemini repeatedly declined to elaborate on the subject.

 

The crypto market may be largely unregulated for quite some time while governments decide whether to place cryptocurrencies under an existing regulatory framework. Even so, unless some action is taken by some group, we will continue to see certain crypto businesses take advantage of consumers because they know they can.

 

Despite the fact that over-the-counter trading desks are hardly average consumers, they still represent high net-worth account holders at major exchanges. With this in mind, consider what will stop exchanges like Gemini from treating average customers the same or even worse in the future.

 

In the end, there is no way for the public to know if these two firms went against Gemini’s terms of service in any fashion that might warrant such a decision being made. Until such a time in which more information is released, it is important to keep the general idea in mind that even the most regulated crypto exchanges are not entirely safe.

 

 

 

By: BGN Editorial Staff

 

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