2022 was the year of several disasters for the cryptoverse. Stablecoins were heavily hit and the confidence around them was slowly fading away. Once again, the pen of a prominent stablecoin was in danger.
Winklevoss twin-led cryptocurrency exchange Gemini rolled out the Gemini dollar [GUSD] back in 2018. While stablecoins are expected to remain pegged at $1, GUSD is starting to lose its peg. Earlier today, the asset fell to $0.988.
Earlier this month, GUSD fell to $0.9555. However, at the time of writing, the stablecoin was trading at $1.01 with heightened volatility.
Nevertheless, the asset has been quite volatile throughout the month. This further encouraged crypto exchange OKX to go ahead and scrap GUSD. According to the company, GUSD will not be available on the OKX from February 1. Elaborating further on the reason behind this, the exchange wrote,
“To maintain a robust spot trading environment, we continuously monitor the performance of all listed projects and regularly review their listing qualifications. Based on user feedback and the OKX Token Delisting / Hiding Guideline, we will remove GUSD”
This was not all. There were more reasons why the GUSD peg could be in jeopardy.
Crypto Exchange Gemini is now under investigation
According to reports, the New York State Department of Financial Services is currently investigating Gemini. This investigation is related to the claims surrounding the Earn loan program. The program, which offered clients up to 7.4% APY on their assets, was subsequently discontinued Genesisa partner of the exchange, stopped withdrawals and went bankrupt.
Gemini’s Earn program is under investigation by the New York regulator for misleading users into believing their money was insured by the Federal Deposit Insurance Corporation. Anyone suggesting that an uninsured product is FDIC insured or intentionally falsifying the scope and manner of deposit protection is prohibited by federal law.
In addition, the company is already facing the heat of the SEC for “sale of unregistered securities” to retail investors. Amidst all this, speculation is that the company’s own assets are in deep trouble.