Gemini’s pre-IPO stats underwhelm, Treasury to KYC DeFi?

Gemini’s financial figures aren’t exactly inspiring investors, and the U.S. Treasury Department could be threatening DeFi fans with tougher identity controls.

Fresh off last week’s successful Nasdaq debut of digital asset exchange Bullish Global (NASDAQ: BLSH), ‘Gemini Space Station Inc,’ the parent company of exchange, custodian, and stablecoin-issuer Gemini, has officially filed for its own initial public offering.

However, Gemini’s filing raises as many questions as it provides answers, most notably, how is Gemini bleeding so much red ink in a crypto bull market? Gemini reported a net loss of $282.5 million in the first half of 2025, up sharply from a $41.4 million loss in the same period last year.

Revenue also fell year-on-year from $74.3 million to just $68.6 million over the same span. In what appears to be a trend among certain crypto operators, Gemini paid out more in salaries and compensation ($71.1 million) than it generated in revenue. Gemini also booked a $62 million loss on its ‘related party crypto loans,’ although this was a marked improvement over the nearly $222 million in losses this category produced in H1-24.

As of August 18, the 24-hour trading volume ($229 million) of Gemini’s exchange was a fraction of the volume enjoyed by U.S. rivals Coinbase (NASDAQ: COIN) ($3.1 billion), Bullish ($1.45 billion), and Kraken ($1.4 billion). Similarly, Gemini’s GUSD stablecoin, which launched in 2018, has a market cap of just $51.6 million, while Ripple Labs’ RLUSD—which only launched 19 months ago—has a cap of nearly $667 million.

Speaking of Ripple, the filing shows Gemini entered into a $75 million credit agreement with Ripple in July. The agreement allows Gemini to take out individual loans of a minimum $5 million at a time “from time to time.” Once that $75 million is reached, an additional $75 million in credit can be obtained, payable in RLUSD.

Beyond its plans to list under the ticker GEMI, Gemini has yet to set the terms (price, amount of shares, etc.) for its IPO. One has to think that the unimpressive H1 results could see those shares priced below what some of its rivals have sought (and received).

The IPO’s dual-class share structure will see Gemini co-founders Cameron and Tyler Winklevoss control all Class B shares, each of which accounts for 10 votes. So the twins have guaranteed themselves control over the company’s direction, even as that direction hasn’t yet generated the kind of results that would give Class A shareholders confidence in the twins’ ability to right this ship.

De-debanking efforts spurring banks to explore crypto options

Meanwhile, the U.S. government’s dismantling of federal regulators’ crypto oversight shows no sign of letting up. On August 15, the Board of Governors of the Federal Reserve System announced that it will “sunset its novel activities supervision program.”

Launched in August 2023, this program focused on “novel activities related to crypto-assets, distributed ledger technology (DLT), and complex, technology-driven partnerships with nonbanks to deliver financial services to customers.” It applied to all banking organizations supervised by the Federal Reserve and put an emphasis on gauging the risks of such ‘novel activities.’

The Fed now says that since this program was launched, it has “strengthened its understanding of those activities, related risks, and bank risk management practices.” As such, the Fed will “return to monitoring banks’ novel activities through the normal supervisory process.”

Since President Trump’s return to the White House in January, federal banking regulators have rescinded most of the crypto oversight rules imposed under Trump’s predecessor, Joe Biden. Trump recently issued an executive order that warned financial institutions not to ‘debank’ entities based on their perceived undesirability (a category that allegedly included his own family’s operations).

Accordingly, major U.S. banks have widened their embrace of digital assets, including the possibility of issuing their own stablecoins, either individually or collectively. On August 14, Reuters quoted Biswarup Chatterjee, global head of partnerships and innovation at Citigroup (NASDAQ: C), saying the company was exploring various stablecoin options, including providing custody services for the fiat assets backing stablecoins. Citi is also looking at custodying digital assets supporting crypto-based exchange-traded funds (ETFs).

Citi already employs blockchain tech for a 24/7 service allowing tokenized U.S. dollar transfers between global financial hubs. Citi is now “developing services to allow clients to send stablecoins between accounts or to convert them to dollars to make instant payments, and is talking to clients about the use cases.”

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Treasury suggests KYC’ing DeFi

Not everyone in the federal bureaucracy has been told to ‘stand down’ on crypto issues. On August 18, the Treasury Department issued a request for comment on ‘Innovative Methods to Detect Illicit Activity Involving Digital Assets.’ Interested parties have until October 17 to make their opinions known.

In terms of digital identity verification (aka identity proofing), Treasury acknowledges ongoing efforts “to develop portable digital identity credentials designed to support various elements of [anti-money laundering/countering the financing of terrorism] and sanctions compliance, maximize user privacy, and reduce compliance burden on financial institutions.”

These identity tools “can also potentially be used by regulated digital asset intermediaries to support onboarding, or by decentralized finance (DeFi) services’ smart contracts to automatically check for a credential before executing a user’s transaction.”

This last bit left some in the DeFi community concerned that their ability to transact anonymously via DeFi protocols is under threat. Blockchain sleuth ZachXBT warned that bad actors will “completely bypass” any new identity checks via their traditional methods: purchasing accounts that have already passed ‘know your customer’ (KYC) checks. Meanwhile, “innocent people would inevitably get their [personal data] leaked by incompetent teams.”

Any new KYC restrictions could also apply to World Liberty Financial (WLF), the DeFi platform supported and partially controlled by the Trump family, which may or may not have something to say regarding the implementation of any new identity rules.

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Trumps’ mining biz prowling Asia for potential treasury vehicles?

Speaking of America’s first family, the Trump-linked block reward mining outfit American Bitcoin Corp (ABTC) is reportedly looking to acquire publicly traded companies in Japan and/or Hong Kong that it can use as crypto treasury vehicles. The Financial Times quoted ‘people familiar with the matter’ saying ABTC “has begun sounding out investors about the potential acquisitions.”

An ABTC representative told the FT that the company “selectively explore[s] accretive opportunities in other markets where we believe U.S. leadership in Bitcoin can drive strong local demand. While we are evaluating possibilities in certain regions, we have not made any binding commitments.”

ABTC, which formed this spring as a partnership between the Hut 8 (NASDAQ: HUT) mining operator and a group affiliated with President Trump’s sons, Don Jr. and Eric, has its own BTC treasury plans, having bought its first 215 BTC tokens after raising $220 million in May.

It remains to be seen whether ABTC’s Asian treasury proxies will hold BTC or adopt other tokens as the foundation of their treasure trove. Eric is a fan of Ethereum’s native token ETH, while the Trumps recently did a $1.5 billion deal with Nasdaq-listed ALT5 Sigma (NASDAQ: ALTS) to launch a treasury based on WLF’s in-house token WLFI.

ABTC is in the process of going public via a reverse merger with the Nasdaq-listed Gryphon Digital Mining (NASDAQ: GRYP). Gryphon shareholders began voting on the merger earlier this month and Securities and Exchange Commission filings indicate that Eric—ABTC’s ‘chief strategy officer’—will hold a 9.3% stake in the merged entity. The Winklevoss twins of Gemini fame also recently bought an undisclosed stake in ABTC, paying in BTC rather than cash.

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ABTC mining rig deal dodges Trump tariffs

Last week, The Miner Mag reported that ABTC had exercised an option for a BTC mining rig procurement with Bitmain, the world’s dominant producer of ASIC rigs. The deal will see ABTC acquire 16,299 Antminer U3S21EXPH units (which were developed in partnership with Hut 8) at a cost of $314 million, for which ABTC pledged 2,234 BTC along with a $46 million prepaid deposit.

ABTC’s Gryphon merger prospectus noted that the deal it worked out with the China-based Bitmain wouldn’t be subject to U.S. import tariffs on foreign mining rigs. These tariffs have become even more controversial as rival miners—including CleanSpark (NASDAQ: CLSK) and IREN (NASDAQ: IREN)—reported receiving invoices from the U.S. Customs and Border Protection (CBP) agency demanding hundreds of millions of dollars based on historical rig imports.

President Trump has said the tariffs won’t be imposed on companies that can demonstrate that they’re working to establish operations on U.S. soil, something all three of the big ASIC firms—Bitmain, MicroBT, and Canaan Inc (NASDAQ: CAN)—are in various stages of implementing. Bitmain recently said its first U.S. assembly line would start pumping out ASICs early in 2026.

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Sherrod Brown v Crypto II: Never Say Die-o in Ohio

Finally, former U.S. Senator Sherrod Brown (D-OH) is attempting a political comeback after becoming the poster child for the dangers of not playing ball with the digital asset sector.

Brown was a three-term veteran who chaired the Senate Banking Committee, where he made his pejorative views on all things crypto plain to see. But his views led crypto-funded political action committees (PACs) like Fairshake to spend $40 million working against him, culminating in Brown’s defeat to GOP challenger Bernie Moreno last November.

With Fairshake issuing a warning in July about the $140 million it has already amassed and its willingness to spend both in primaries and next year’s mid-term elections, Politico warned that week that Brown’s comeback bid against GOP incumbent Jon Husted—who was appointed to the Senate when J.D. Vance became Vice-President—will be an uphill slog.

Fairshake rep Josh Vlasto told Politico that in 2024, voters had “sent a clear message that the Sherrod Brown and Elizabeth Warren agenda was deeply out of touch with Ohio values. We will continue to support pro-crypto candidates and oppose anti-crypto candidates, in Ohio and nationwide.”

Ohio-based Democratic strategist Jerry Austin countered that the big-spending crypto sector had “shot their wad” and that many of the controversial policies enacted by Trump would weigh a lot heavier on Ohio voters’ minds (and wallets) than who’s more pro-crypto.

In a recent Nieman Lab interview, journalist Molly White called the vast sums spent by the crypto sector in 2024—particularly in primaries in which neither candidate had much of a position on crypto—“a show of force. This was a marketing strategy. They were able to leverage those victories in those primaries and threaten Congresspeople going forward to say … we’ll do that to you if you don’t get on board with our agenda.”

And Fairshake’s success may be breeding copycats. David Bailey, organizer of the annual BTC conference at which then-candidate Trump appeared during the 2024 campaign, said earlier this month that he was “thinking about raising a $100m-$200m PAC … to advance Bitcoin priorities.” Seems power—or at least the ability to threaten those in power—is addictive.

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