The Winklevoss, twin owned cryptocurrency exchange, Gemini, has announced a partnership with stock exchange Nasdaq to utilize the company’s proprietary technology to monitor trading pairs across the crypto market.
Under the agreement, Gemini will integrate Nasdaq’s SMARTS Market Surveillance in an attempt to detect and defend against market manipulation and other fraudulent trades. The system will monitor across the trading pairs BTC/USD, ETH/USD, and BTC/ETH, along with surveilling activity across the Gemini auction process used to determine the settlement price for the XBT futures contracts traded on Cboe’s CFE Exchange.
Tyler Winkelvoss spoke on the partnership:
"Since launch, Gemini has aggressively pursued comprehensive compliance and surveillance programs, which we believe betters our exchange and the cryptocurrency industry as a whole. Our deployment of Nasdaq's SMARTS Market Surveillance will help ensure that Gemini is a rules-based marketplace for all market participants.”
Valerie Bannert-Thurner, Senior Vice President and Head of Risk & Surveillance Solutions for Nasdaq added:
"Being regulated by the New York State Department of Financial Services (NYSDFS), Gemini is held to the utmost standards in terms of capital reserve requirements. This is a major milestone in the application of SMARTS- and an important indicator of our commitment to expand the use of our market technology into non-traditional marketplaces, as well as new frontiers beyond the capital markets.”
According to Nasdaq, SMARTS automates the “detection, investigation and analysis of potentially abusive or disorderly trading, to help improve the overall efficiency of the surveillance organization and reduce cost, even as market complexity and new regulations increase.” The tool is in use across 65 countries, where it is used by 45 marketplaces, 17 regulators, and 140 plus market participants, including “several buy-side institutions.”
The news comes just weeks after the Winklevoss twins proposed a self-regulatory body to oversee the crypto industry – a proposal that was met with much praise and support from the Commodity Futures Trading Commission.