Gemini, the fully regulated New York-based digital asset exchange for both individuals and institutions has provided information on how the company will respond if the Bitcoin network splits into two separate blockchains (often called a “fork”) sometime soon. The team stated, “the highest priority at Gemini — more important even than keeping our exchange open — is ensuring that all of our customers’ asset balances are held securely.”
Gemini stated that in the event of a chain split, they will carefully consider its response and how to move forward. If there is a chain split in the near future, it is unlikely to be a “clean” chain split in which almost all hash power, exchange volume, and economic activity happen on only one blockchain. Gemini says they prefer and encourage a “clean” chain split, no matter which side of the scaling debate wins, but they are preparing for a variety of outcomes.
In the event that Gemini detects a chain split or anticipates an imminent chain split, they will temporarily suspend BTC deposits and withdrawals. Gemini will endeavor to resume deposits and withdrawals as soon as it’s safely able to do so, but that process may take up to a week to complete.
What Gemini is currently planning:
- The “BTC” balance and trading activity users see on Gemini will likely reflect the chain with the greater total difficulty.
- Gemini may choose to eventually open new order books for the chain with less total difficulty.
- Gemini will make every effort to support withdrawals of the chain with less total difficulty if it ends up having a significant amount of hash power, exchange volume, or economic value. However, unlike with the Ethereum / Ethereum Classic hard fork last year, Gemini cannot yet guarantee that it will succeed in this effort, due to a lack of two-way replay protection in the various forks of Bitcoin Core (including Segwit2x, UASF, BitcoinABC, and Bitcoin Unlimited).
The Gemini team finished its update saying:
“We understand that the policies listed above leave quite a lot to Gemini’s discretion. We would rather have clearly defined policies in place right now; however, it’s unclear what will happen on the blockchain in the coming days, weeks, and months, and we would much rather play it safe than making hasty, ill-informed decisions and risk mismanaging your funds. As soon as we gain further insight on the situation, we will make additional blog posts to better detail how your funds on Gemini will be secured.”