11-13-2026 
|
Getting your Trinity Audio player ready...
|
TL;DR: Gemini’s Q3 revenue fell 20% year-on-year to $40.9 million, with a $58.6 million net loss. The CFTC warned Kalshi of possible charges over unreported contracts, and Utah filed felony charges against Kalshi and its co-founders.
Key Takeaways:
- Gemini: unlike its twin owners, it ain’t pretty. Q3 revenue fell to $40.9 million, with a $58.6 million net loss.
- Gemini’s retail trading volume fell for a fourth straight quarter to $600 million.
- Gemini’s $56.4 million compensation bill topped its total Q3 revenue.
- CFTC mulls rare corrective action against Kalshi over unreported event contracts.
- Utah’s criminal charges against Kalshi show this fight is getting dangerous, with the co-founders facing up to 15 years in prison.
- States lead the CFTC and prediction markets 43-6 in court rulings.
Gemini’s (NASDAQ: GEMI) prediction market is still furiously treading water, while America’s prediction market regulator is now furiously trying to make it look as if it’s actually been doing its job this whole time.
Figures released Thursday show the Gemini digital asset exchange/crypto credit card issuer/prediction market platform generated revenue of $40.9 million in the three months ending September 30. That’s a ~20% fall from the same period last year and 12% below Q2’s revenue.
Gemini’s monthly transacting user numbers were flat from Q2, but its retail trading volume shrank for the fourth consecutive quarter, totaling just $600 million in Q3, one-third of the total one year ago.
Institutional volume fared better on a sequential level, rising $800 million to $3.9 billion, although that’s barely one-quarter of the Q325 total.
That quarter-on-quarter institutional boost helped total exchange revenue rise ~7% to $13.4 million, but that’s barely half the sum generated a year ago. Here again, the retail numbers have fallen every quarter for a year, slipping nearly 10% from Q2 to $9.9 million and down 43% year-on-year.
OTC revenue took a major hit, falling nearly two-thirds from Q2 to just $1.7 million. Meanwhile, Gemini’s heavily promoted prediction market offering added just $796,000, which is 52% higher than Q2’s figure, but still a pretty sorry sum for a product that Gemini founders Cameron and Tyler Winklevoss have been shilling incessantly via their social media feeds for a year now.
Gemini hailed the prediction market revenue percentage gain, while claiming that the product’s October monthly retention figures are through the roof and that 1/3 of last month’s new prediction traders are new to Gemini.
Gemini’s services revenue slipped nearly 9% sequentially to $21.3 million, led by declines in its credit card segment ($15.5 million, -4%) and advisory fee revenue tumbling over three-quarters to just $612,000. Staking revenue fared better, rising 3.4% sequentially to $4.2 million, although that’s more than one-quarter below the staking tally in Q325.
Operating expenses totaled just under $120 million, including $56.4 million in salaries and compensation. So if you’re counting along at home, that compensation stat alone is $15.5 million higher than Gemini’s total Q3 revenue.
The net result of all this was an operating loss of $79 million and a net loss of $58.6 million, and things would have been much worse had the value of Gemini’s digital asset treasury not improved by $136 million since Q2. But based on current trends, with the BTC token (as of Thursday afternoon) $12,000 below its price on September 30, Gemini’s Q4 could make for grim reading.
Mind you, any BTC losses could be offset by gains in the privacy-focused ZCash (ZEC) token, which is currently trading at ~$943. That’s well off the $1,650 range it enjoyed in September but up 86% since the year began.
One year ago, the Winklevii started a ZEC-based treasury, using a publicly traded vehicle they rebranded as Cypherpunk Technologies Inc (NASDAQ: CYPH). As of September, Cypherpunk held ~2% of all ZEC in existence, with a stated goal to ultimately claim a 5% share of this market. It’s unclear how much (if any) of this ZEC might be held by Gemini, but all these roads lead to Winklevii, so…
Meanwhile, some major news landed just before the earnings release, with CoinDesk reporting that Gemini had sold its mothballed U.K./EU operations to Singapore-based stablecoin payments platform Kast for $10 million. The UK/EU operations, inert as they are, are likely valuable primarily via the licenses they hold.
Neither Gemini nor Kast have confirmed the report, although a Kash job ad for a ‘Head of Europe’ from a couple of months ago stated that candidates would need to “manage the transition of Gemini’s UK and EU team members to KAST.”
Apart from ZEC’s performance, it hasn’t been the greatest of times for the Winklevii, who are not only dealing with a stagnant business but also have scathing public commentary on anything related to the Democratic Party, and whose enthusiastic pro-Trump, multi-million-dollar crypto campaign spending now looks even more ill-advised.
Gemini shares closed Thursday down 3.7% to $2.62, down 73% since the year began, and off nearly 81% in the past 12 months.
Sel freezes over
The fact that there are new political sheriffs in D.C. can’t have gone unnoticed in the halls of the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC), the two U.S. federal agencies tasked with the bulk of digital asset oversight.
Some of these new sheriffs have already made clear their intent to summon the regulatory chiefs they believe have done little or nothing to rein in the excesses of crypto and prediction market operators.
CFTC chair Michael Selig has at times appeared to bend over backward to accommodate prediction market operators like Kalshi and Polymarket, which operate under CFTC oversight as ‘designated contract markets’ (DCM).
So it was something of a headscratcher when Politico reported on November 10 that the CFTC had “warned Kalshi of potentially imminent charges tied to the launch of certain wagers by the prediction market giant.”
Politico’s source claimed the CFTC was investigating whether Kalshi failed to give the regulator a proper heads-up regarding “dozens of new products that were in the works.” A Kalshi spokesperson told Politico the matter was “a procedural error involving the submission of a handful of contracts, many of which weren’t live.”
While Politico’s source claimed the CFTC’s investigation had begun “months” ago, the timing of the report—coming just one week after Democrats emphatically regained control of both Congressional chambers in the midterm elections—does suggest a new ‘Jesus is coming, look busy’ vibe that Selig might not have imagined necessary until recently.
Under Trump 2.0, the CFTC began allowing DCMs to self-certify the event contracts they want to offer to their customers. As one critic noted in August, the CFTC had yet to reject any of the ~2,500 self-certification notices that operators had submitted to the regulator since January 2025.
In July, the CFTC warned its DCMs about submitting “broad, template-style certifications that combine many potential event contract variations into a single certification.” It was the second warning on this subject, but it didn’t appear to have much impact.
In August, Polymarket self-certified wagering on NFL injury return dates, despite the CFTC having previously proposed rules to prohibit such wagers based on the likelihood of athletes or those connected to them taking advantage of insider knowledge. Worse, the CFTC suggested these markets “create perverse financial incentives that could encourage or facilitate physical harm to athletes.”
Perhaps Polymarket thought it could get away with it because Kalshi was already offering such markets on NFL players to its customers. At least, until the CFTC ‘asked’ its licensee to stop doing so a few weeks later. Kalshi appeared to comply, but the injury markets abruptly reappeared a few days later, only to disappear again a few days after that, this time for good (although we haven’t checked in the last hour, so…)
The CFTC’s decision to take any kind of punitive action against Kalshi for blatantly flouting the rules could reflect a desire to impress the incoming Democrats. However, it’s unlikely to succeed on that front. Regardless, the brouhaha is the price regulators pay when operators come to believe they’re free to do what they want because the referee plays for their team.
In another potential ‘Jesus is coming’ signal, Kalshi announced on November 12 that it had ended its contract with Donald Trump Jr., who’d been serving as an advisor to the company since January 2025. Kalshi claimed the contract’s demise was a mutual decision, but also said they were acting due to a conflict of interest arising from Don’s venture capital firm, 1789 Capital, holding a major stake in Polymarket.
The thing is, while 1789 took a $300 million stake in Polymarket a few months back, it was public knowledge that 1789 had taken a “double-digit millions” stake in Polymarket (actually $200 million) well over a year ago. The fact that this reality didn’t seem to bother Kalshi until Donald Trump Sr.’s party took a ballot box beating may offer a clue as to what’s really going on here.
Utah’kin to me?
Prediction market operators have benefited immensely from Selig’s willingness to use public funds to help fight their legal battles. The CFTC has spent freely opposing states that argue in court that sports-based ‘event contracts’ offered by prediction markets are sports bets by another name and thus that operators must acquire state gambling licenses and submit to state regulation.
On October 27, the CFTC announced it was suing Utah for attempting to prohibit CFTC-registered DCMs from offering sports ‘contracts’ to Utah residents. In August, a federal court rejected Kalshi’s bid to prevent Utah from enforcing its gambling laws, which permit no form of gambling whatsoever. In fact, the ban is written into the state constitution.
In that August ruling, U.S. District Judge Robert Shelby said a state enforcing its gambling laws “is not inconsistent with the CFTC’s regulation and oversight of derivatives markets. Congress is aware that some States permit gambling while others do not.”
Kalshi appears to have ignored that ruling, leading Utah Attorney General Derek Brown to file a civil suit against Kalshi in state court, prompting the CFTC’s legal response.
In announcing the CFTC suit v. Utah—the tenth state the CFTC has sued over this issue but the first with a Republican governor—Selig dodged the sports betting issue, saying “Utah seeks to shut down prediction markets across a wide variety of markets … Congress entrusted the CFTC to be the federal regulator with sole responsibility to oversee these markets … the CFTC has the expertise and responsibility to defend its exclusive jurisdiction over commodity derivatives, and that’s exactly what we’ll do.”
Utah clearly doesn’t scare easily, as on October 28, the state filed felony criminal charges against Kalshi and co-founders Tarek Mansour and Luano Lopes Lara. The charges came after an agent acting on behalf of Utah’s attorney general placed 12 wagers on NFL games over two weeks in September. And in a serious blow to the Kalshi/CFTC cause, Utah’s suit was randomly assigned to none other than Judge Shelby.
Kalshi responded to the criminal charges with its usual bluster, calling it “crazy overreach” and accusing the state of “playing politics.” But the charges are no joke, as state law imposes prison sentences of up to 15 years for the second-degree felony charges facing Kalshi’s co-founders, and up to 5 years for each of the third-degree felony charges.
Utah is the second state to take criminal action against Kalshi, following Arizona’s filing of misdemeanor charges earlier this year. In April, the U.S. District Court for the District of Arizona granted the CFTC’s request for a temporary restraining order (TRO) barring Arizona authorities from proceeding with their charges.
However, an August ruling by the Ninth U.S. Circuit Court of Appeals rejected Kalshi’s bid to continue operating in Nevada while its legal entanglements there are ongoing. Legal analyst Daniel Wallach told the Associated Press that this ruling could result in a resumption of Arizona’s legal action against Kalshi.
Wallach keeps a running tally of the predictions/CFTC v. states results, including rulings on TROs, injunctions, stays, etc., which, as of November 10, stand at 43-6 for the states. But every actor in this passion play understands that, ultimately, the only ruling that matters will come from the U.S. Supreme Court.
The One First legal newsletter addressed this likelihood this week, saying there’s “real pressure” on the Supremes to add the issue to their docket. The newsletter predicted that it will be “one of the most significant statutory federalism cases we’ve seen in some time.”
We’ll note One First’s conclusion on the CFTC/prediction markets’ legal argument that the Commodity Exchange Act, as amended by the 2010 Dodd-Frank Act, gives the CFTC “exclusive jurisdiction” over swaps, and that swaps include sports betting due to the statute defining swaps as contracts based on an event “associated with a potential financial, economic, or commercial consequence.”
As One First rather acidly puts it: “The Kalshi cases ask whether Congress, without ever quite saying so, handed one of the oldest areas of state police power [gambling] to a federal agency most Americans have never heard of—through a statutory definition that no one read that way for more than a decade after it was enacted.”
Sounds cut and dried. But hey, don’t rule out the possibility that 78-year-old Clarence Thomas could die sometime over the next two months and Trump could nominate Selig to take his place on the Court and the GOP rams it through the Senate as a final middle finger to the incoming Dems. Has anyone opened a market on Kalshi for that yet?
FAQs:
How much revenue did Gemini make in Q3?
Gemini earned $40.9 million in Q3, down 20% year-on-year and 12% from Q2. It posted a $58.6 million net loss.
How much did Gemini’s prediction market earn?
It earned $796,000 in Q3, up 52% from Q2, despite heavy promotion by the Winklevoss twins.
Did Gemini sell its UK and EU business?
CoinDesk reported that Gemini sold its inactive UK and EU operations to Kast for $10 million. Neither company has confirmed the deal.
Why is the CFTC investigating Kalshi?
The CFTC says Kalshi may have failed to properly notify it about dozens of new products. Kalshi calls it a procedural error.
Why is Utah charging Kalshi?
Utah’s constitution bans all gambling. The state filed felony charges after an agent placed 12 NFL wagers on Kalshi.
What penalties do Kalshi’s founders face?
Tarek Mansour and Luana Lopes Lara face up to 15 years in prison on second-degree felony charges.
Why did Kalshi drop Donald Trump Jr.?
Kalshi cited a conflict of interest because his firm, 1789 Capital, holds a major stake in the rival Polymarket.
Will the Supreme Court rule on prediction markets?
Likely. The Court would decide whether the CFTC or the states control sports event contracts.
Watch: What Happens When Blockchain Becomes Invisible?
