Crypto exchange Gemini has sold its UK and European operations to Singapore-based company KAST. The buyer paid less than $10 million. Gemini is owned by the Winklevoss brothers.
KAST is a stablecoin payments company. It builds accounts, cross-border transfers and payment cards. Stablecoins are coins whose exchange rate is pegged to the dollar.
The divisions were acquired mainly for their licenses. For a trader, this is a snapshot of the state of the crypto market: there are fewer deals, and what is being bought in them are regulatory permits.
What did KAST acquire?
The operations had already been wound down. Gemini Space Station announced the closure of operations in the UK, the European Union and Australia back in February. Of its foreign markets, the company kept only the US and Singapore.
- Less than $10 million - the deal amount.
- About 25% of employees - layoffs worldwide after the February announcement.
- Ticker GEMI - under which Gemini shares trade on Nasdaq.
Who is the buyer?
KAST was founded by Raagulan Pathy, a former executive at Circle. The company builds payments around stablecoins.
- $80 million - the round KAST raised in March.
- QED Investors and Left Lane Capital - the investors that led the round.
- Licenses and regulatory requirements - part of the money was earmarked for this.
Why buy for licenses?
- Permits. According to April data, suitors for Gemini's closed divisions were interested primarily in European regulators' permits.
- Speed. This is ready-made market access without years of approvals.
- The team. KAST's job posting for the head of its European division explicitly specifies the transfer of Gemini's UK and European employees.
Both sides are saying almost nothing. A KAST representative: "we actively look at deals as revenue and presence grow." Gemini declined to comment.
What does this mean for a trader?
The crypto deal market is shrinking. According to Architect Partners' estimates, 67 deals worth $2.2 billion were announced in the third quarter. That is 83% less by value than the quarter before.
The main takeaway: access to the European market now costs less than the product - two divisions went for less than $10 million.
Crypto trading at prop firms depends on their rules. You can compare conditions and the list of coins in the prop firm catalog, and pick a challenge - for your market.
What's next?
The nearest data point is earnings.
- Thursday - Gemini's third-quarter report, after the US market close.
- $100 million - how much Winklevoss Capital Fund injected into the company in May.
- $14 per Class A share - the buyback price; the fund paid in Bitcoin.
Do you trade crypto on a venue like this?
You hold positions where market access is decided by licenses and deals like this one. At crypto prop firms the dependency is different, but the rules are strict. They set the list of coins, position rollover through the weekend, the daily loss limit and trading at the moment news breaks. You need to check your trading against these points before paying for an evaluation. A comparison by conditions will show where your mode of operation is even allowed.