In a blog post on the 25th April, cryptocurrency exchange Gemini have announced plans to implement Nasdaq SMARTS market surveillance in a step towards “building a rules-based marketplace” and increasing trading oversight.
The Nasdaq inc. technology provides a suite of visual tools for monitoring complex market data in order to rapidly detect manipulation and malpractice. Gemini’s market surveillance team will use the industry-standard toolset to monitor activity across all of their trading pairs, as well as the Gemini Auctions which provide the settlement price for the Cboe bitcoin futures contracts that launched in late 2017.
“Proven at over 50 marketplaces and regulators, SMARTS Market Surveillance is the industry benchmark for real-time and T1 solutions for market surveillance, supervision and compliance.”
The focus from Gemini on developing a “rules-based marketplace” and the exchange’s desire to “become a market leader in custom surveillance rule creation and alerting for the crypto-asset market” comes at a time when authorities across many jurisdictions are once-again investigating potential regulations for the growing crypto-asset market.
A recent request for information from New York Attorney General Eric Schneiderman to most major crypto-exchanges was met with positivity from Gemini CEO Tyler Winklevoss. In a statement to the New York Post, he said that Gemini “continue to embrace thoughtful regulation and collaboration on our mission to help build the future of money”. This approach appears to be very different to that of Kraken CEO Jesse Howell, who has stated they will not be complying with the request for information.
It is worth remembering that the Winklevoss’ application for a Bitcoin ETF was essentially rejected on grounds that the underlying market is too susceptible to manipulation and is subject to a lack of transparency. It appears that these are big steps being taken by Gemini in the interest of beginning to eliminate the manipulation risks in the eyes of existing regulatory bodies and establish practices to allow for robust monitoring of the developing crypto-asset marketplace going forward.