2022 was the year of several catastrophes for the crypto-verse. Stablecoins were heavily impacted and the trust around them slowly fell. Once again, a prominent stablecoin’s peg was in danger.
Winklevoss twins-led cryptocurrency exchange Gemini rolled out the Gemini Dollar [GUSD] back in 2018. While stablecoins are expected to stay pegged to $1, GUSD is beginning to lose its peg. Earlier today, the asset dipped down to $0.988.
Earlier this month, GUSD descended lower to $0.9555. However, at press time, the stablecoin was trading for $1.01 with increased volatility.
Nevertheless, the asset has been quite unstable throughout the month. This further encouraged crypto exchange OKX to move ahead and delist GUSD. According to the firm GUSD will not be available on the OKX starting from Feb.1. Further elaborating on the reason behind this, the exchange wrote,
“In order to maintain a robust spot trading environment, we constantly monitor the performance of all listed projects and review their listing qualifications on a regular basis. Based on feedback from users and the OKX Token Delisting / Hiding Guideline, we will be delisting GUSD”
This wasn’t all. There were more reasons why GUSD’s peg might be in danger.
Crypto Exchange Gemini Is Now Under Probe
According to reports, the New York State’s Department of Financial Services is currently investigating Gemini. This probe is related to the claims around its Earn lending program. The program, which offered customers up to 7.4% APY on their assets, was discontinued after Genesis, a partner of the exchange, ceased withdrawals and declared bankruptcy.
Gemini’s Earn program is being investigated by New York’s regulator for deceiving users into believing that their funds were insured by the Federal Deposit Insurance Corporation. Anyone who implies that an uninsured product is FDIC-insured or intentionally falsifies the scope and manner of deposit protection is prohibited under federal law.
In addition, the firm is already facing the heat of the SEC for “selling unregistered securities” to retail investors. Amidst all of this, the firm’s native assets are speculated to be in grave trouble.