By Lyv, Bruce Shen, and Felix Xu

TL;DR

Gemini, the compliant and secure cryptocurrency exchange founded by the Winklevoss twins, recently officially listed on the Nasdaq (ticker: GEMI), becoming the third US-listed cryptocurrency exchange after Coinbase and Bullish. The listing raised approximately $425 million and received enthusiastic market response. On its first day of trading, GEMI's stock price soared 45% before closing up over 14%, bringing its market capitalization to $3.8 billion.

Gemini, once known for prioritizing compliance, now faces a stark reality: a net loss of $282.5 million in the first half of 2025, long-term negative operating cash flow, and a planned IPO with a maximum fundraising limit of approximately $317 million, which looks more like a defensive strategy focused on debt repayment. Despite its product portfolio spanning spot/institutional custody, offshore perpetual contracts, the GUSD stablecoin, credit cards, and Nifty Gateway, it remains far ahead of competitors like Coinbase and Robinhood in key metrics such as trading volume, monthly active users, and platform assets. Compliance has devolved from a premium tag to an industry threshold. This article analyzes key information from the S-1, focusing on both product and financial aspects, offering a sober assessment of Gemini's competitiveness and investment value, helping to determine whether this "compliant exchange" is worth investing in.

01 Gemini's Products/Ecosystem

Product and revenue engine (multi-threaded parallel)

As a US-based onshore crypto exchange focused on compliance, Gemini boasts a multi-pronged product and revenue stream. For both spot and institutional services, the exchange offers the Exchange App and ActiveTrader for retail, while institutional customers receive Gemini Prime and custody services (multi-sig, offline cold storage, and compliance audits). Core revenue comes from transaction and custody fees.

Regarding retail pricing, the Gemini App ("Gemini Mode") charges a 1.49% transaction fee + a 1.00% convenience fee (the convenience fee fluctuates with slippage, capped at 2%) for Instant/Recurring orders. Limit orders incur a 1.49% transaction fee and no convenience fee. ActiveTrader utilizes a tiered market maker/taker structure: 0.20% for makers and 0.40% for takers with 30-day trading volume < $10,000, decreasing to 0.05%/0.15% for $1 million, 0.00%/0.04% for $100 million, and 0.00%/0.03% for $250 million. For institutions and custodians, Gemini Custody® charges an annualized fee of 0.40% or $30/month/asset (whichever is greater), with an administrative withdrawal fee of $125. There is no minimum size requirement (assuming it covers the minimum monthly fee).

Compliance and security features include cold storage, multi-party controls and role governance, ISO 27001 and SOC 2 Type 2 certification, and disclosure of hot and cold insurance limits ($25M for hot wallets and $100M for cold storage, for a total of $125M). The institutional trading stack integrates Prime, eOTC, and Exchange, serving hedge funds, family offices, and financial institutions. eOTC supports delayed net settlement and credit extension.

In terms of revenue structure, the retail side is primarily comprised of a fixed fee (App) + tiered fees (ActiveTrader). Institutional business relies on a traditional strategy of high volume and low fees, lowering the overall take-rate. Trading fees remain the primary source of revenue, accounting for approximately two-thirds. Custody services are charged based on management and withdrawal fees, while features like "instant trading from cold storage" enhance institutional engagement. Key differentiation lies in institutional security/compliance and cold storage capabilities (including insurance). Furthermore, the high-tiered (≥$100 million) maker/taker rates of 0%/0.04% offer attractive pricing to large clients, but this also dilutes the average fee rate.

The derivatives offering, managed by the Gemini Foundation, which operates outside the US, is positioned as a key tool for increasing trading depth and fee revenue, but places higher demands on compliance boundaries and risk management. The product is a non-US linear perpetual swap (operating entity: Gemini Artemis Pte. Ltd.). The contract is denominated and settled in Gemini Dollars (GUSD), equipped with funding fees and a forced liquidation/insurance fund mechanism (a 0.5% forced liquidation fee, calculated hourly). Media reports indicate that initial leverage will be offered up to 100x. Regarding fees, the official Derivatives Fee Schedule utilizes a maker/taker tier, with a negative/zero fee cap for large market making. Regarding regulatory expansion, the company obtained a MiFID II investment services license from the MFSA on May 9, 2025, and plans to launch regulated derivatives (including perpetual swaps) in the EU/EEA. On August 20, 2025, it obtained a MiCA license, expanding its coverage to 30 European countries and further paving the way for derivatives and structured products. Its revenue primarily comes from maker/taker transaction fees, a 0.5% liquidation fee, and withdrawal/funding-related operating expenses. Funding fees are essentially bilateral settlements between long and short positions, and the platform does not necessarily count them as revenue. Overall, the "MiFID II + MiCA" dual-certification path significantly reduces compliance uncertainty and helps introduce high-net-worth and institutional liquidity to Europe. However, ultimate scalability still depends on the robust operation of liquidity, risk management, and clearing systems.

Regarding stablecoins, GUSD, issued by Gemini and pegged 1:1 to the US dollar, offers institutional benefits with the advancement of US stablecoin legislation (such as the "GENIUS Act"). However, its market capitalization remains smaller than that of USDT/USDC. Regarding compliance and transparency, GUSD has been regulated by the New York Department of Finance (NYDFS) since 2018. Gemini states that its 1:1 reserves are comprised of cash, government money market funds, and short-term US Treasury bonds. Gemini also issues monthly independent accounting certifications, and its reserve account is dedicated to its intended use. A comparison of scale (for reference): As of September 3, 2025, GUSD's circulating market capitalization is approximately $51 million, while USDC's is approximately $72 billion, and USDT's is approximately $168 billion, a significant gap. If legislation progresses, it will generally benefit compliant stablecoin issuers, including GUSD.

Gemini's payment and credit card business is being developed in partnership with WebBank and Mastercard. According to the card agreement document dated February 2025, the card has no annual fee, and the APR varies based on credit qualifications and the benchmark interest rate. Rewards are deposited instantly in the form of crypto assets. Gemini states that residents of all 50 US states are eligible to apply (subject to terms and conditions). The marketing team previously launched an XRP-themed page. In terms of incentives, cardholders can choose from a variety of cryptocurrencies offered on Gemini and receive up to 40% cash back on eligible purchases. Cardholders also receive up to 3% cash back on dining, 2% on groceries, and 1% on other purchases. Rewards are automatically deposited into the cardholder's Gemini account. The revenue structure follows industry norms: interest rate spread, annual fee, penalty interest, various fees, and an interchange commission. WebBank serves as the issuer within the Gemini system, and the specific commission ratio is not disclosed. The strategic value of this business lies in expanding daily payment touchpoints and strengthening brand penetration. The themed promotions promote customer acquisition and engagement.

Regarding NFTs, Gemini acquired Nifty Gateway in November 2019 and transformed it into Nifty Gateway Studio (NGS) in 2024. This shift from a trading platform to a platform focused on brand-creator collaborations and distribution. In recent years, the company has announced numerous collaborations with art projects, fostering content and ecosystem touchpoints that complement its core business. Overall, Gemini is integrating trading, custody, clearing, and compliance through a diverse offering encompassing spot/institutional trading, derivatives, stablecoins, payment cards, and NFTs. The platform is simultaneously focusing on fee structure, institutional engagement, and brand engagement, aiming to enhance long-term revenue resilience through the combined benefits of compliance and product depth.

Competition Landscape and Market Share (Exchange)

Gemini is in the "top tier" of compliant spot exchanges, but not in the first tier. According to Kaiko's comprehensive ranking, its spot market share rose from approximately 1% to 2% in the spring of 2025, demonstrating a "two steps forward, one step back" pattern of resilience, with periods of growth followed by a partial reversal. Overall, this demonstrates both upward momentum and volatility within the compliant market.

Comparatively speaking, Coinbase remains the leading US stock market player, with clear advantages in integrated retail and institutional operations. The synergy with derivatives businesses like options creates greater economies of scale and brand value. Kraken, a long-established compliant US exchange, has a long history in the EU market and a more established regional presence. Regarding retail entry points, Robinhood's acquisition of Bitstamp (announced in 2024, closing in 2025) strengthens its institutional and global capabilities, further increasing competition for retail entry points in the compliant US market.

In the primary market, Bullish's successful 2025 IPO has heightened the capital market's risk appetite and valuation for assets on compliant exchanges, providing valuable insights for Gemini's potential future offering window. Within this landscape, we believe Gemini's market share and ranking are not among the top tier, and its exchange products and services are poorly differentiated. While focused on compliance, Gemini's scale is too small and lacks sufficient edge compared to its US competitors.

User reputation and product richness

Judging by user reputation and product coverage, Gemini's listing and availability are among the most popular compliant platforms: it currently supports over 70 crypto assets and covers over 60 countries (Source: S-1/Reuters). Third-party reviews indicate a 4.8/5 rating on the App Store and a 4.3/5 on Google Play, indicating a generally positive mobile experience and stability. However, on Trustpilot, reviews are significantly divided, with negative feedback primarily focused on risk control triggering and customer service response, suggesting room for improvement in user communication and process experience within its compliance module.

In terms of product diversity, Gemini's product line is broad and comprehensive: it offers both institutional custody and trading stacks, as well as simultaneous developments in derivatives, credit cards, stablecoins, and the NFT ecosystem, forming a relatively complete business matrix. However, in terms of depth and activity (such as order book thickness and institutional market-making coverage), there remains a noticeable gap compared to first-tier platforms. This not only impacts fee negotiation power but also directly impacts unit economics. Given that the S-1 currently provides inadequate breakdown of key operating metrics, further monitoring will be required to assess the company's progress in liquidity acquisition, institutional partnerships, and fee structure improvements.

02 History and Business Status

Establishment and positioning

Gemini was founded in 2014 by Cameron and Tyler Winklevoss in New York as Gemini Trust Company, LLC. On October 5, 2015, the New York Department of Financial Services (NYDFS) granted it a Limited Purpose Trust license under the New York Banking Act, establishing its foundational approach of prioritizing security and compliance. Regarding compliance and auditing, Gemini completed its SOC 2 Type 1 audit conducted by Deloitte in 2018, and passed both SOC 1 Type 2 and SOC 2 Type 2 audits (covering both the exchange and Gemini Custody) on January 19, 2021. Gemini differentiated itself from its peers early on by positioning itself as a "compliance model."

Related party business transactions

In terms of related party and business cooperation, the company has signed service agreements with entities jointly held by WCF (such as Elysian, Salient, and WCM) to obtain key operational support such as equipment leasing, cloud services, data centers, and management consulting; for the C-end and payment ecosystem, it has in-depth cooperation with multiple parties: first, it has linked its business with Ripple to expand Ripple USD (RLUSD) as the base currency for all spot trading pairs on the platform, and jointly launched the XRP reward credit card; second, it has cooperated with WebBank, and it will launch the XRP co-branded credit card as the issuing bank, expanding the application scenarios and customer acquisition touchpoints of encrypted payments under a compliance framework.

Business Scale (media reports based on S-1 disclosures, used as a reference for scale)

Platform size (as of June 30, 2025)

• Lifetime trading volume ≈ $285bn;
• Assets on our platform (AUC) > $18bn
• Monthly Trading Users (MTUs) ≈ 523k; Institutional Clients ≈ 10k;
• Cumulative processed transfer amount > $800bn.

The above are all reported on by multiple authoritative secondary sources for S-1 excerpts/database pages: Investopedia, Renaissance Capital/IPO-Scoop, Investing.com, etc.

• Product Coverage Supplement (S-1/DRS Excerpt): Supports 80+ trading assets, and Custody covers 130+ assets (as of 2025-06-30).
• S-1/A filing index (for original verification): SEC EDGARCIK: 0002055592 (latest S-1/A index page).

03 Financial Analysis

Financial analysis: Growth cannot hide losses, and the company is heavily dependent on external funding.

Performance Overview: Heavy Losses

2024 operating data: showing a growth trend, achieving 512,000 monthly trading users, annual trading volume of US$38.6 billion, and platform custody assets of US$18.2 billion.

Continued large losses: Growth is offset by significant losses. A net loss of $159 million was recorded in the 2024 period.

Losses worsened in the first half of 2025: the company generated revenue of $68.6 million and processed $24.8 billion in spot trading volume, but its net loss for the same period was as high as $282.5 million.

Assets, liabilities and cash flow

Operating cash flow remains negative: The company's core business has yet to achieve self-sustaining profitability. Operating cash flow is projected to be -$109 million in 2024 and -$207 million in 2023, primarily due to adjustments for non-cash items and changes in working capital.

Cash reserves (as of 2024/12/31): US$42.8 million in cash and cash equivalents and US$28.4 million in restricted cash.

Segregated client funds: The bank holds US$575.6 million in client custody funds, which are segregated and used exclusively for client interests, demonstrating its commitment to asset security and compliance.

Survival mode: Relying on external blood transfusions

High-risk financial and asset strategies:

• Bitcoin Treasury Strategy: The company uses BTC as a core reserve asset and prefers to finance its holdings through US dollar debt rather than directly selling BTC. This can alleviate cash pressure in a bull market, but also amplifies cyclical risks in a down market.
• Clearing Historical Risks ("Earn Incident"): Under NYDFS regulations, Gemini has returned over $2 billion worth of crypto assets to Earn users and paid a $37 million fine. While costly, this move has substantially resolved the historical issue, partially repaired its reputation, and reduced contingent liability risks.

Funding source: Multiple credit support to maintain operations:

• Core support comes from Founders Fund (WCF): As of the end of 2024, the company's survival is heavily dependent on continued "blood transfusions" from WCF, including:

1. Outstanding cryptocurrency loans: 5,054 BTC, 26,629 ETH

2. Outstanding US dollar principal: US$116.5 million

3. WCF also holds all the convertible bonds issued by the company.

• Supplemented by external credit: A $75 million credit line was obtained from its strategic partner Ripple as additional liquidity guarantee.

Future plans: IPO with debt repayment as the core

• The funds raised from this IPO will be mainly used to repay third-party debts to optimize the capital structure and reduce leverage.

Summarize

Gemini's financial situation is worrying, with huge net losses largely driven by non-cash or highly volatile items such as fair value adjustments of convertible bonds issued by related parties, interest on borrowings, and changes in the fair value of crypto assets held.

The company has long relied on external capital transfusions from the funds of the two founding brothers. The purpose of IPO financing is to repay third-party debts in priority, but the financing amount of US$400 million still cannot fully cover all the company's debts, and the company's operating cash flow outflows an average of 100-200 million yuan per year. The funds raised from the IPO can only support the company's operations for 2 years.

Comparison of operating data with peers: significant gap

Analysis of Gemini's own operating status

• Operating Data: Gemini expects relatively modest growth in both user numbers and trading volume in 2024. Monthly trading users will increase from 448,000 in 2023 to 512,000 in 2024, and total trading volume will rise from $12.5 billion to $38.6 billion. Platform assets will also see significant growth, from $9.1 billion to $18.2 billion.
• Profitability: Despite the improvement in operating figures, Gemini's profitability remains a significant challenge. While EBITDA is projected to improve slightly from negative $110,000 in 2023 to negative $13,000 in 2024, it remains negative. This means Gemini's revenue will not cover its operating costs, including employee salaries. The path to profitability remains uncertain, raising concerns about profitability.

Comparison with peers' operating data

Trading volume:

• Gemini's trading volume is much lower than that of Coinbase and Bullish. Coinbase's trading volume in 2024 is as high as $1.162 trillion, Bullish's is $547 billion, and Gemini's is only $38.6 billion.
• Gemini's main revenue comes from retail investors. Although institutional transactions have increased significantly, the total transaction volume is far behind Coinbase.

User scale:

• Gemini's user base is significantly smaller than Coinbase and Robinhood. Coinbase will have 8.4 million monthly trading users in 2024, Robinhood will have 25.2 million, and Gemini will only have 512,000.
• Compared with Coinbase and Robinhood, the gap in user numbers is huge.

Profitability:

• Coinbase and Robinhood both achieved profitability (positive EBITDA) in 2024, while Gemini's EBITDA remained negative.
• Coinbase demonstrates an absolute advantage in profitability.

Platform assets:

• Coinbase and Robinhood have significantly higher platform assets than Gemini. Coinbase's platform assets in 2024 will be $404 billion, Robinhood's will be $193 billion, and Gemini's will be only $18.2 billion.

Summarize

In summary, despite its growth, Gemini still lags significantly behind its main competitors in terms of market share, user base, and profitability, and needs to further improve its profitability and market competitiveness. Therefore, the company's core competitiveness lies not in its market share but in its differentiated compliance strategy.

04 Core Team

Founder and Background

Key players: The company was founded and led by twin brothers Cameron and Tyler Winklevoss. They are widely known for their early legal battle with Mark Zuckerberg over Facebook's founding rights, and used the settlement funds to become early investors in Bitcoin and strong advocates for the cryptocurrency.

Serial Entrepreneurs and Investors: Prior to founding Gemini, they established Winklevoss Capital in 2012 as their family office and venture capital vehicle. Through this firm, they have actively invested in numerous cryptocurrency and technology startups, building a broad industry ecosystem network.

Political participation and policy lobbying

Openly supporting the Trump camp: The Winklevoss brothers are the most prominent Donald Trump supporters in the crypto industry. In 2024, the two donated $1 million worth of Bitcoin to Trump's campaign and publicly criticized the Biden administration's "war on crypto," arguing that its regulatory policies are stifling innovation.

Systematic Political Donations and Lobbying: Their donations are not isolated acts, but part of a broader $190 million wave of political contributions from the crypto industry. According to reports from the Financial Times and other media outlets, the Winklevoss brothers, along with key figures from companies like Coinbase, Ripple, and a16z, have invested vast sums of money through Super PACs, aiming to systematically influence the American political landscape.

05 Summary: Investment value ranks last in vertical tracks

Although Gemini has taken a step ahead on the road to compliance and has worked hard to build a diversified product matrix of "spot + derivatives + stablecoins + payments", an in-depth analysis of its financial status, operating data and competitive landscape shows that its investment value is almost at the bottom in the vertical track of compliant crypto exchanges.

1. Weakening Differentiation Advantage: Gemini's "compliant" label no longer provides a sufficiently wide moat against similarly licensed giants like Coinbase and Kraken. The exchange's products and services are poorly differentiated, and Gemini's small scale hinders its ability to generate strong network effects and cost advantages. Its "compliant" selling point has failed to translate into sustained market share leadership or profitability.

2. Dire financial situation: Sustained and growing losses, perennially negative operating cash flow, and heavy reliance on funding from the founders' fund reveal the fundamental fragility of its business model. The IPO's primary purpose is clearly to repay third-party debt, making it more of a survival tactic to maintain operations than a strategic expansion to drive future growth. The funds raised will only cover approximately two years of cash burn, leaving the path to profitability uncertain and distant.

3. Significant operational data gap: Gemini's operational data reveals a comprehensive gap with the industry leaders. Whether in terms of trading volume, monthly trading users, platform assets, or profitability, Gemini lags far behind competitors like Coinbase and Robinhood. With Robinhood's acquisition of Bitstamp, market competition will intensify, squeezing the space left for second-tier players like Gemini.

Therefore, for investors seeking to invest in compliant cryptocurrency trading platforms, Gemini is not an ideal target. Allocating capital to leading companies with solid market share, resilient business models, and demonstrated profitability, such as Coinbase, Kraken, and Robinhood, is undoubtedly a more prudent and wise choice.