Token Description & Project Background

Gemini Dollar (GUSD) is a stablecoin issued by the prominent cryptocurrency exchange Gemini, with each token backed by an equivalent amount of US dollars in a 1:1 ratio. It is considered a fully-reserved asset, ensuring that it can be redeemed for $1 USD at any time. GUSD operates similarly to other fiat-tracking assets with decentralized environments, enabling transactions on decentralized exchanges, providing liquidity, and earning interest through digital lending platforms. However, unlike many decentralized and algorithmically-backed stablecoins, GUSD is actively regulated and insured by centralized systems.

The USD reserves supporting GUSD are held in three secure locations: the vaults of FDIC insured banks, money market funds, and US Treasury Obligations. Additionally, the reserves of GUSD are audited monthly by the independent accounting firm BPM LLP. 

Gemini is a US-based cryptocurrency exchange founded by high-profile serial entrepreneurs Tyler and Cameron Winklevoss in 2014. GUSD was launched in September 2018 and initially experienced some volatility before stabilizing at its intended value of $1. With the exception of a temporary detachment from its peg in April 2020, GUSD has consistently maintained its price of $1 ever since. 

Risks of GUSD

Like an investment in other crypto assets, there are some general risks to investing in GUSD. These include:  (i) volatility risk and liquidity risk, (ii) short history risk, (iii) demand risk, (iv) forking risk, (v) code defects, (vi) regulatory risk, (vii) electronic trading risk, and (viii) cyber security risk. For additional information of these and other general risks associated with crypto assets and Uphold’s platform, please refer to the Risks Specific to Holding Digital Assets statement.

In addition to these general risks, an investment in GUSD is subject to the following specific risks:

• Although GUSD provides monthly and historical attestations, there is still a possibility of the GUSD token temporarily deviating from its peg in times of significant volatility or disruptions to the custody provider’s financial stability. 

We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with GUSD. Investors should conduct their own research and perform their own assessment before trading any crypto asset to determine the appropriate level of risk for their personal circumstances.

The Gemini Exchange, and aforementioned founders are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of GUSD have no recourse to the aforementioned founders, Gemini Exchange, or Uphold if GUSD declines in value for any reason.

Changes to applicable law may adversely affect the use, transfer, exchange, or value of any of your crypto assets, and such changes may be sudden and without notice.

Uphold’s Evaluation Process

Prior to listing GUSD on the Uphold Platform, Uphold performed due diligence on GUSD and determined that GUSD is unlikely to be a security or derivative under relevant securities legislation. Uphold’s analysis including reviewing publicly available information on the following: 

• The creation, governance, usage, and design of GUSD, including ensuring the source code is open-source, audited and peer reviewed, security and monthly attestations.
• The supply, demand, maturity, utility, and liquidity of GUSD.
• Any marketing materials put forward by the GUSD social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
• Material technical risks associated with GUSD, including any code defects, security breaches and other threats concerning GUSD and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them.
• Legal and regulatory risks associated with GUSD, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of GUSD. 

General

Uphold has prepared this Crypto Asset Statement based on publicly available information. Although Uphold has taken steps to obtain information from apparently reliable sources, information contained in this Crypto Asset Statement may be inaccurate, incomplete or out-of-date. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.

Uphold users should read the Risks Specific To Holding Digital Assets statement for additional discussion of general risks associated with crypto assets made available through the Uphold platform.  

Canadian residents, please note that Uphold has filed an application for registration in certain Canadian jurisdictions but has not yet obtained registration. Until such time as Uphold obtains registration, Uphold has agreed to abide by the terms of an undertaking available at the following link. Please also review the Uphold Canada – Crypto Risk Statement for additional discussion of general risks associated with the crypto assets made available through Uphold Platform. Please be aware that statutory rights of action for damages or rescission in section 130.1 of the Securities Act (Ontario) and, if applicable, similar statutory rights under securities legislation in the other provinces and territories of Canada do not apply in respect of this Crypto Asset Statement or other disclosures on the Uphold website and Risks Specific To Holding Digital Assets statement. 

Last updated on June 21, 2023.