Blockchain research shows how a Gemini custodian is able to change, stop, or reverse GUSD transactions every 48 hours.
The implementation of the recently launched Gemini dollar (GUSD) stablecoin can be completely changed by a Gemini custodian every 48 hours, according to a study authored by blockchain researcher Alex Lebed and crypto consultant Alexey Akhunov, published on Medium on September 11.
In the research, the authors review the code of the GUSD’s smart contract in order to demonstrate that the implementation of the Gemini USD can become non-transferrable or frozen at any moment, which is noted in the Gemini dollar’s white paper. The option of pausing, blocking, or reversing GUSD transfers is one of the basic technical principles of the new centralized stablecoin introduced by Tyler and Cameron Winklevoss, according to the white paper.
The Gemini dollar white paper describes this feature along with other three main principles of the GUSD blockchain design, citing the need for the ability to manage token transfers in case of unforeseen circumstances:
“[Gemini can] pause, block, or reverse token transfers in response to a security incident (i.e., catastrophic event).”
Specifically, the study’s authors review the smart contract of the Gemini dollar, implemented as an ERC20 token on the Ethereum (ETH) blockchain, in order to demonstrate how to users can “independently” detect that feature.
The research is based on the Gemini address that was found on both a Reddit thread and Bitcoin Talk, while the researchers claimed that nevertheless, there is still “no trustless ways to know” that this address is the only address of Gemini.
As the study has found, Gemini’s custodian is able to generate an unlimited amount of Gemini USD, and it can completely alter the implementation every 48 hours, making the coins non-transferable. In conclusion, the study’s authors appeared to question such an custodian ability in regard to “truly decentralized and censorship-resistant monetary systems.”
Following approval from the New York Department of Financial Services (NYDFS), the Winklevoss brothers launched the new centralized stablecoin Gemini dollar on Monday, September 10. The GUSD is backed by U.S. dollars that are “held at a bank located in the United States and eligible for FDIC ‘pass-through’ deposit insurance, subject to applicable limitations.”
The Gemini dollar represents the first crypto-related asset from the Winklevoss twins, who previously received a second rejection from regulators to launch Bitcoin (BTC) exchange-traded fund (ETF) in July.
Source: Cointelegraph https://cointelegraph.com/