Gemini launches ETF and fund manager-focused custody, clearing, and trade service

Published at: March 4, 2021

Being your own bank isn’t for everyone — and that includes companies and fund managers looking to issue cryptocurrency investment vehicles.

Cryptocurrency exchange and custodial services provider Gemini announced today the launch of a new service tailored specifically towards funds and ETFs: Gemini Fund Solutions.

The new service will offer “custody, clearing, trade execution, and other capital markets” facilities, as well as “provide education around the crypto marketplace” and act “as a centralized hub for crypto liquidity providers,” according to the announcement.

The company currently provides custodial services for fund issuers Purpose Investments, whose Bitcoin ETF cracked $100 million in volume in the first few hours of trading earlier in the month, and Evolve Funds Group, whose Bitcoin ETF cracked a half billion in assets in its first week. Gemini is also listed as the custodian for a range of ETFs under consideration for regulatory approval. 

Gemini Fund Solutions was formed in part to hone in on and accommodate the demand for institutional-grade custody services as retail appetite for crypto exposure grows ravenous.

“As interest in cryptocurrency skyrockets, crypto funds have become an increasingly attractive option for fund managers looking to add crypto exposure to their clients’ portfolios. But to date, the market for providing these services to fund issuers has been fragmented,” the announcement notes.

While multiple institutions — such as the oldest bank in America, BNY Mellon — have announced that they will be offering custody services, crypto custody entails technical expertise that some tradfi organizations may be unprepared for. Likewise, ETFs designed to reflect holdings in crypto assets necessitates specialized technology and infrastructure — not to mention experience.

“The services and, more importantly, the expertise provided by Gemini have been crucial to the launch and success of the Purpose Bitcoin ETF,” said Som Seif, founder and CEO of Purpose Investments. “[...] Gemini helped make our vision a reality and allowed us to innovate and truly democratize access to cryptocurrency.”

Providing custody services for Canadian ETF providers may also make Gemini’s own bid to offer an American crypto ETF even stronger in the eyes of regulatory bodies. 

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