Winklevosses Buy Offsets to Cut Their Bitcoin Carbon Footprint
Gemini Trust, the cryptocurrency exchange run by Cameron and Tyler Winklevoss, purchased about $4 million in credits to help offset the carbon emissions footprint of the Bitcoin it holds in custody.
The firm made a donation in that amount to Climate Vault. The nonprofit purchased the permits, which will prevent more than 341,000 metric tons of carbon from entering the atmosphere. Gemini plans to continue to offset its carbon footprint until only renewable energy is used in securing the Bitcoin network, Chief Executive Officer Tyler Winklevoss said in an interview.
“We want to build a better world” with crypto, Winklevoss said. “It’s also important to be sustainable as we navigate into that vision.”
The offsets cover Bitcoins held in Gemini’s so-called hot wallets -- used in transactions -- and cold wallets, which store the coins for the long term. Gemini’s average daily Bitcoin balance so far this year reached 250,843 Bitcoins, or about $8.3 billion at current prices, the exchange said.
The Gemini Green initiative, which will incorporate climate-conscious practices into the business, comes as the crypto industry grapples with reducing its environmental footprint while seeking to broaden its appeal to more institutional investors. In mid-May Tesla Inc.’s Chief Executive Officer Elon Musk tweeted that the carmaker won’t accept Bitcoin as payment until the network uses more renewable energy. The comment sent Bitcoin’s price tumbling and spurred conversations on how to make the industry greener.
Whether the industry’s push toward green energy has legs remains to be seen. With Bitcoin’s price remaining at about half its mid-April levels, many crypto businesses may see their margins compressing, and won’t have the luxury of investing in green initiatives.
Still, Environmental, Social, and Governance (ESG) considerations are important for many institutional investors that are starting to tip-toe into crypto. Gemini serves as the custodian for nine exchange-traded funds and two closed-end publicly-traded funds in North America.
“We are just playing our part to address the ESG conversation and component of Bitcoin that a lot of people have heard about, and they can come to Gemini and use Gemini Green custody, and they can fulfill their ESG mandates,” Winklevoss said.
Climate Vault is already working with about 20 different businesses and institutions, including trading firm DRW, on offsetting their carbon footprints.
“What’s so monumental about Gemini’s decision is, I think, this is a way to completely remove the environmental concerns around Bitcoin in a way that you don’t see in other industries,” Michael Greenstone, co-founder of Climate Vault and a professor of economics at the University of Chicago, said in an interview.
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