The end of the year celebrations will have a bitter taste for cryptocurrency investors who have placed their faith in projects like FTX, Terra, etc. Those who have invested in the Gemini Dollars stablecoin are also among them. Recent events in the Winklevoss brothers’ project apparently raise doubts.
Gemini Dollar (GUSD), the new TerraUSD (UST)?
Friday, December 16, CoinDesk revealed that the Gemini crypto exchange was back in service after a 7-hour hiatus. Its administrators justified this problem by scheduled maintenance.
However, last November, Gemini suspended withdrawals for its Earn yield product after Genesis Global Capital lost $1.8 billion. To say that Gemini Earn is around $900 million.
Aware of the concerns of crypto investors in connection with the series of service interruptions, Gemini promised an investigation.
” Gemini is investigating reports of potential service disruptions. All client accounts and funds remain completely secure “, they said.
Gemini has updated the dispute resolution clause of its terms of service
Born in September 2018, the stablecoin GUSD has attracted a lot of crypto investors for its reliability combined with “ US dollar solvency and price stability “. It helped propel Gemini Earn to the forefront from its launch in February 2021. And the promise boiled down to an initiative to “ beat inflation rates by receiving returns through stablecoins “.
So crypto investors like Daniel Zukich didn’t hesitate to put $10,000 in Gemini Dollars, reports Forbes. A rate of return of 8% is indeed a good return on investment.
” He had the highest return in the Gemini Earn program. It was obvious. Its price does not vary because it is a stablecoin. I thought, why not put my money there? “says Zukich.
Still, demand for GUSD plummeted after Cyclone FTX hit. Alarmed, investors decided to withdraw their assets without succeeding. Indeed, Gemini confidently asked them not to do so.
On December 15, Gemini sent an email to its customers stating that its terms of service dispute resolutions were subject to a update. In other words, the company intends to assign the management of future disputes to a separate arbitration forum.
Some investors right now regret not reading the fine print of Gemini Earn’s terms and conditions. However, this slightest gesture would have taught them that the Gemini Dollar and the other tokens lent to Genesis do not benefit from any insurance or protection. Needless to demonstrate that this malaise will sooner or later cause a major upheaval within this ecosystem.
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