Winklevoss Twins: Our Gemini Bitcoin Exchange Will Have 'Security-First Mentality'

Winklevoss Twins Facebook Settlement Appeal BeginsCameron and Tyler Winklevoss gained famed as the disputed co-founders of Facebook, or at least idea initiators of the social media phenomenon.
Now their focus is on the controversial top virtual currency. The twins want to create the first fully regulated bitcoin exchange — named Gemini — for American investors and speculators.
“Gemini is laying the foundation for the new world of money, where assets will be sent around the globe in an instant and at no cost,” the Winklevoss’ website says. “And who wouldn’t want to live in that world?”
The brothers have invested heavily in bitcoin. In 2008, they received $65 million in Facebook shares and cash after legally challenging the social network’s founder, Mark Zuckerberg. The twins have now hired engineers from top hedge funds, enlisted a bank and approached regulators with the intent of of opening their exchange this year.
The twins have financed the venture themselves, but it remains a risky project because bitcoin has been widely targeted by hackers taking aim at other exchanges. The brothers addressed the security of Gemini in a lengthy blog post this week.
“Since last February, Tyler and I have been assembling the Gemini team,” the brothers say. “Our goal was simple: bring together the nation’s top security experts, technologists, and financial engineers to build a world-class exchange from the ground up with a security-first mentality. It’s true that Bitcoin’s promise is a new, frictionless money, but that all becomes academic if we don’t build towards an ecosystem that is free of hacking, fraud and security breaches.”

This has been a busy week for bitcoin investors. In a separate piece of news, the Silicon Valley company, Coinbase, a retail brokerage firm and facilitator for bitcoin-accepting businesses, announced a $75 million financing round — the biggest ever for a bitcoin start-up — with backing from the New York Stock Exchange and the Spanish bank BBVA.
Even with their deep pockets, the Winklevoss brothers face hefty challenges. The first major bitcoin exchange, Mt. Gox in Japan, lost hundreds of millions of dollars, ending up in bankruptcy last year. More recently, a breach at a prominent exchange in Europe, Bitstamp, helped fuel a brief price collapse in bitcoin earlier this month below $200. That’s from a peak above $1,200 in late 2013. This week, bitcoin is back over $200, surging near $250 this weekend.
The twins say they have spent the better part of the last 30 months focusing on the virtual currency.
“Over the past two and a half years, we have spent a great deal of time educating ourselves and others about Bitcoin; investing in bitcoin; investing in Bitcoin-related companies; filing an S-1 registration statement with the Securities and Exchange Commission to create the Winklevoss Bitcoin Trust (an ETF focused on bringing bitcoin investment exposure to main street investors) which will list on NASDAQ; and launching a bitcoin price index called WinkDex that will price our ETF (online, iPhone, Android).”

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