Evolve ETFs selects Gemini as custodian for Canadian crypto ETFs

Gemini, a cryptocurrency exchange founded by the Winklevoss twins, will act as the custodian for Evolve's newly launched leveraged Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs), LBIT and LETH, which began trading on the Toronto Stock Exchange on Tuesday. The ETFs aim to offer "modestly leveraged" exposure to retail investors.

In a blog post, Gemini announced that the ETFs will provide investors with 1.25x exposure to BTC and ETH, using cash borrowing instead of derivatives to enhance returns. Unlike traditional leveraged ETFs that use derivative strategies, these products "will rely on cash borrowing to amplify returns that will optimize the costs of the leverage for the funds," according to Evolve ETFs.

"As Canada's first modestly leveraged crypto ETF offerings available to retail investors, these products exemplify the spirit of innovation that defines today's rapidly changing digital assets industry," said Evolve ETFs.

Gemini emphasized that its custody services include "SOC 1 Type 2 and SOC 2 Type 2 security examinations by Deloitte," and that assets would be "segregated on our internal ledger for the benefit of fund owners."

The partnership comes as Gemini, the New York-based cryptocurrency exchange, has been working with Goldman Sachs and Citigroup on a potential public offering that could happen as early as this year, although no final decision has been made yet.

As previously reported by crypto.news, the Winklevoss twins have been vocal supporters of former U.S. President Donald Trump during the election cycle. His potential return to the White House is widely regarded as a positive development for the crypto industry.