Something strange is going on with the stablecoin issued by Cameron and Tyler Winklevoss’ Gemini Trust Company. Over the past several days, CoinMarketCap data on trading using the Gemini dollar (GUSD) has spiked dramatically—and it all seems to stem from one exchange, the China-based OEX.
Seemingly overnight, there was a surge in GUSD daily trading volume. From December 2 to December 13, that number was in a range between roughly 1.4 million and 2.3 million, according to CoinMarketCap. However, on December 14 and 15, daily trading volume was around 18 million. On December 16 and 17, it was around 30 million. Before then, the figure never exceeded 17.6 million.
As of publishing time (Monday at 11:50 p.m. Eastern Time), 24-hour volume was at $32.3 million worth of GUSD. Of that amount, $29.6 million—92 percent—came from trades against bitcoin on OEX.
Smaller exchanges sometimes engage in enormous amounts of wash trading to give the appearance of liquidity and drive traffic to their site through links from CoinMarketCap. As reported on Modern Consensus back in August, BitForex was accused of doing that with bitcoin versus tether volume.
As it turns out, OEX is on the Exchange Advisory List compiled by an outfit calling itself the Blockchain Transparency Initiative.
So what’s actually going on? We’ve reached out to both Gemini and the New York State Department of Financial Services, the entity that regulates Gemini, for comment. We will keep readers informed if and when we do.
If anyone has any insight or tips, feel free to drop us a line at editors-at-ModernConsensus-dot-com.
[Editor’s note: A quote from the Blockchain Transparency Institute that appeared in earlier versions of this story was removed due to its lack of relevance.]