Winklevoss twins warn UK not to ‘politicise’ crypto rules amid US regulators’ ‘warpath’
The Winklevoss twins have warned ministers not to “politicise” the UK’s crypto regime today as they launch a charm offensive in London amid a “warpath” and charges from regulators in the US.
In an interview in London with City A.M., billionaires Cameron and Tyler Winklevoss, the founders of New York-headquartered crypto exchange Gemini, said they were “encouraged” by the state of UK crypto rules and had met with the Financial Conduct Authority, the Bank of England and the Lord Mayor of London, Nicholas Lyons, this week.
The visit puts the pair among a number of US crypto bosses making overtures across the Atlantic in recent months as firms face a brutal clampdown from regulators in the US, triggered by the collapse of FTX last year.
Gemini is facing charges from US regulator the Securities and Exchange Commission over its Earn Lending program for the “unregistered offer and sale of securities to retail investors” alongside now-collapsed lender Genesis.
Tyler Winklevoss, Gemini’s chief executive, told City A.M. regulatory moves in the UK were positive however and could yield further investment in the country in future.
“We are encouraged [by] the state of regulation here. We know obviously the UK has a huge tradition of being a thoughtful regulator and a forward thinking regulator. And that’s why we chose to be here – there’s a lot of credibility,” he said.
“We made that decision to invest here years ago, and we’re here to express that we want to continue to do that and make the UK a home for crypto.”
Gemini won a Electronic Money Institution (EMI) license in the UK in 2020 as well as passing the FCA’s cryptoasset registration process, the second market it won regulatory approvals from outside of the US.
Crypto firms in the UK are currently regulated on money laundering grounds, but lawmakers are set to grant regulators fresh powers to draw up specific rules for the sector via the Financial Services and Markets Bill making its way through parliament.
Ministers have been looking to promote the UK as a hub for crypto firms in a bid to tempt firms to set up shop here, but Cameron Winklevoss, Gemini’s president, fired a warning shot today after an influential group of MPs said crypto trading should be regulated like gambling.
“[A] house of House of Commons [Treasury Select Committee] report talked about crypto being gambling, which we found kind of curious,” he told City A.M..
“I guess gambling is anything that can go to zero, which means that oil or gold, or other commodities could also fall into that bucket, as well as venture investments. It feels like there might be a double standard on some level there.”
He added that it’s important to make sure “the technology doesn’t get politicised like it has in the US”.
The comments point to punishing clampdown on the sector from US regulators in the wake of the implosion of Sam Bankman-Fried’s FTX, which the pair described as “not a crypto problem [but] a fraud problem”.
Gemini has been caught in the fallout of the collapse and faces charges from the US regulators, which Cameron Winklevoss described as “on the warpath”.
Tyler Winklevoss has previously called the actions of the SEC “totally counterproductive” and has claimed the regulator’s moves do “nothing to further our efforts and help Earn users get their assets back”. The pair declined to comment on the matter when quizzed by City A.M. yesterday.
Gemini has threatened to sue the chief of Digital Currency Group Barry Silbert over the repayment of a $900m loan and wrote on its website on Friday that the firm had failed to cough up a $630m payment due.
Gemini said that along with other parties it was “working with Genesis to suggest terms for an amended plan of reorganisation that could be advanced without DCG’s consensual participation”.
The Winklevoss’s charm offensive in London follows a similar move by competitor Coinbase last month, in which chief Brian Armstrong said the US regulatory clampdown could lead it to explore a London headquarters in future.