Gemini Passing SOC-2 Examination a Step Towards Bitcoin ETF Approval
Winklevoss twins’ Gemini exchange has announced successfully passing a Service Organization Control level 2 (SOC-2) type 1 examination by big four accounting firm Deloitte, which they believe is ‘a factor in favor’ of possible approval of their Bitcoin ETF petition.
Gemini’s Product is Trust
Gemini’s stated mission is to provide its clients with a safe and secure platform to exchange and store their cryptocurrencies. According to Gemini, “this is paramount to our mission to build the future of money.”
To improve its security controls, in 2018, Gemini hired Deloitte & Touche LLP, one of the Big Four auditors, to perform a SOC-2 Type 1 examination.
SOC-2 is based on Trust Service Criteria, which focuses on non-financial reporting controls. Specifically, SOC-2 reviews the effectiveness of controls implemented for minimizing risks on security, availability, processing integrity, confidentiality, and privacy of a system. On the other hand, SOC 1 deals with the effectiveness of financial reporting controls.
Gemini states that the areas emphasized by the SOC-2 examination were: Gemini Exchange’s application, infrastructure, and underlying customer database, and Gemini’s institutional-grade storage system that stores the private keys of online and offline wallets.
As a result, on January 29, 2019, upon completion of the review, Gemini announced,
This makes Gemini the world’s first cryptocurrency exchange and custodian to demonstrate this level of security compliance in protecting customer data and funds.
“Gemini’s product is TRUST,” Cameron Winklevoss added. “We have just added another layer of trust by becoming the world’s FIRST crypto EXCHANGE and CUSTODIAN to complete a SOC 2 Review by Deloitte.”
Winklevii Remain Committed to Bitcoin ETF
The Winklevoss twins started Gemini in 2014 in New York, where the company is licensed as a trust, subject to fiduciary and capital reserve standards. Gemini is also subject to strict cybersecurity standards.
In this connection, Forbes highlights the importance of Gemini passing the SOC-2 examination,
Their bet may yet pay off with the new announcement that Gemini has secured the SOC for Service Organizations Type 1 examination typically reserved for the most stringently run financial services or technology firms.
The Winklevoss twins’ faith in Bitcoin remains strong as is their commitment to getting their Bitcoin ETF application approved by the SEC. In fact, becoming the first exchange to pass SOC-2 examination could give the Commission more reason to approve their COIN exchange traded fund.
In early January 2019, they stated in a Reddit’s Ask Me Anything session,
We are committed as ever to making an ETF a reality! The U.S. Securities Exchange Commission (SEC) could regard Gemini’s SOC-2 report as a factor in favor of its possible approval of Winklevoss’ petition for a Bitcoin ETF.
Given Gemini’s efforts to improve security, is the SEC now more likely to approve their Bitcoin ETF? Let us know your thoughts in the comments below!
Images courtesy of Twitter/@winklevoss, Shutterstock