Business 10 May 2018Gerald Fenech
Winklevoss twins move ahead with crypto ETP exchange patent
Tyler and Cameron Winklevoss, considered to be among the popular personalities in the cryptocurrency circuit, have moved to consolidate their position in the crypto space. The U.S. Patent and Trademark Office (USPTO) has awarded a patent to the Winklevoss twins, allowing them to settle exchange-traded products (ETPs) with digital currencies like BTC, Ripple, Ethereum, and Dogecoin.
A basic explanation of ETPs is that they are derivatives-based instruments that are traded on a securities exchange. The ETP is usually valued on the basis of a benchmark stock or commodity such as oil and gold, but in the Winklevoss’ case this will be BTC or another cryptocurrency. At present, there are derivative-based cryptocurrency investments available in the form of BTC futures contracts offered by the Cboe and CME Group. However, there are no ETPs for the U.S. market at the moment.
The twins first applied for the patent in December 2017 via their jointly owned venture, Winklevoss IP, according to documents published by the USPTO. The Winklevoss twins hold a large multi-billion valued stock of digital currencies, which they purchased several years ago at rock bottom prices. In 2015, they founded Gemini, a cryptocurrency exchange that became the world’s first Ethereum exchange in 2016. They have been very vocal supporters of the cryptocurrency revolution worldwide. Winklevoss IP has already secured five patents in 2018, including the latest one last month which aims to improve security in cryptocurrency transactions using common cryptographic techniques.
It is interesting to note that this patent application is an attempt by the twins to acquire a cryptocurrency-based exchange traded product. The first ETF proposal was turned down by the U.S. Securities and Exchange Commission (SEC) last year.
At the time, the SEC said they decided to turn down the twins’ proposal because it wasn’t “consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.”
But with major investment companies like Goldman Sachs bring BTC trading to the Wall Street community, change could be around the horizon. It might just be possible that the SEC will be more positive to the cryptocurrency asset class, although this attempt to introduce an ETP still needs to be approved by the securities regulator.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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