Nasdaq to invest $50 million in Winklevoss-founded crypto exchange Gemini

Gemini, the crypto exchange founded by Cameron and Tyler Winklevoss, has secured Nasdaq as a strategic investor ahead of its initial public offering this week, CNBC has confirmed.

Nasdaq plans to invest $50 million in the crypto company in a partnership that will allow the stock exchange to offer Gemini's custodial services to its financial institution clients. Gemini will also become a distribution partner for Nasdaq's trade management system known as Calypso.

The investment, first reported by Reuters early Tuesday, is separate from Gemini's planned initial public offering this week. The crypto company plans to raise up to $317 million Friday in its public debut on the Nasdaq.

"We continue to expand our capabilities to serve our institutional clients and the broader investor universe as the regulatory landscape around crypto assets evolves," a Nasdaq spokesperson said in a statement shared with CNBC. "To prepare for future developments while maintaining an open-ecosystem approach to market infrastructure, we will partner with Gemini on a non-exclusive basis as part of a broader strategy to offer multi-custodial and staking services for crypto assets. Additionally, we will work with Gemini as a distribution partner for Nasdaq Calypso, to serve firms seeking to benefit from its collateral management capabilities across traditional and digital assets."

"The investment and partnership structure we have employed with Gemini is consistent with those that we typically structure through Nasdaq Ventures," they added.

The news comes a day after Nasdaq filed a proposal with the U.S. Securities and Exchange Commission seeking a rule change that would allow for the trading of tokenized stocks and exchange-traded products. While interest in tokenization has grown in recent months, a formal rule change would allow Nasdaq to become the first major traditional stock exchange to allow tokenized securities trading.

In crypto, tokenization is the process of issuing digital representations on a blockchain network of publicly traded securities, real world assets or any other form of value. Holders of tokenized assets don't have outright ownership of the assets themselves.

Gemini was founded by the Winklevoss twins in 2014 and holds more than $21 billion of assets on its platform as of the end of July.