Winkelvoss Twins Donate Thousands to Governor of New York

The Winklevoss twins, billionaire owners of a cryptocurrency exchange called Gemini, donated $100,000 to the governor of New York just one month before their exchange was approved by the city to list ZCash, according to a report in the New York Post.

The implication of the article is clear – that the donations to the governor influenced the decision of the regulator.

Time to buy the dip?

Background

The governor of New York is Andrew Cuomo of the Democratic Party. He has been the governor of New York since 2011 and will stand for re-election in November of this year.

Cameron and Tyler Winklevoss are twin brothers who in December 2017 became the world’s first Bitcoin billionaires. Their exchange is licensed by the New York Department of Financial Services and has daily trading volumes of $70.8 million, according to coinmarketcap.com.

The claim

The article says that the twins sent $50,000 dollars each to Cuomo on “April 24” – it does not specify the year. The article implies that as a result of this: “On May 14, state regulators licensed the Winklevosses’ firm, Gemini Trust Company, to trade Bitcoin and other emerging currencies.”

This writer found these dates confusing because official documentation shows that Gemini received its licence to trade Bitcoin on the 5th of October 2015, and a licence to trader Ethereum (at the time defined as an “emerging currency” on the 5th of May 2016:

Source: dfs.ny.govSource: governor.ny.gov

The next paragraph clarified things:

Source: New York Post

The approval received by Gemini on the 14th of May 2018 was actually to add the cryptocurrency ZCash to its listings:

Source: dfs.ny.gov

The exchange is indeed the first cryptocurrency exchange in the world to list ZCash, as Finance Magnates reported at the time. ZCash is a fairly new cryptocurrency with a market capitalisation of $945.3 million, according to coinmarketcap.com.

The relevant licence is called the BitLicense, which was created by the New York Department of Financial Services in July 2014 and came into effect in August 2015. According to Fortune, the licence caused many Bitcoin companies to leave the city because it costs tens of thousands of dollars to apply for one.

According to the article, the twins then gave Cuomo another $15,000 on the 20th of June (2018). For the current campaign, Cuomo has reportedly raised $6 million in six months while his opponent, Cynthia Nixon, has raised $1.6 million since March.

Official comments

Cuomo reelection-campaign spokeswoman Abbey Fashouer said: “We appreciate their support. No contribution of any size influences any government action.”

New York Department of Financial Services spokesman Richard Loconte said: “DFS takes care in reviewing every application. The department has no knowledge of political contributions and such contributions have absolutely no bearing on DFS’s independent authority and decision making.”

A Winklevoss spokewoman said: “Tyler and Cameron Winklevoss have supported — and continue to support — many effective leaders around the country. They contributed to Gov. Cuomo’s campaign because they believe he’s doing a great job, is a problem-solver, and is definitely the right person to lead New York in the years ahead.”

The report notes, however, that this was the first time that they have donated to Cuomo, who has already served two two terms as governor.

Gemini and regulation

In March 2017, the Securities and Exchange Commission rejected Gemini’s application to list Bitcoin exchange traded funds, which are a kind of financial derivative. After Bitcoin futures were approved at the CBOE in December 2017, hope was revived, but in January one of Gemini’s lawyers said that he considered approval unlikely.

In a further development, in June 2018 the twins acquired a patent for the world’s first Bitcoin exchange traded products, which are a kind of derivative that includes ETFs.

According to Bloomberg, which cited anonymous sources, Ripple offered a cash payment of $1 million to Gemini in return for the exchange listing XRP. The offer was declined. At the time, a Ripple spokeswoman told Bloomberg that this was “inaccurate” but did not specify further.