Gemini flounders as accusations fly

The founders of crypto exchange Gemini have been on a campaign to gin up buzz around its business; yet publicly available information shows some of its core products and services are in decline.

The big picture: Gemini primarily makes money on fees earned when its users trade, plus a percentage on digital assets under its custody, like other U.S. crypto exchanges.

• Ancillary businesses include its stablecoin the Gemini dollar (GUSD), a credit card, over-the-counter trading, a yield-generating Earn program (before it was halted), and NFTs.

State of play: Cameron and Tyler Winklevoss were recently on what one of the founders called a world tour. The "Winklevii" twins were pictured in emerging crypto centers like Dubai, Singapore, Hong Kong and the United Kingdom earlier this year.

• The company declined comment to Axios.

Between the lines: There's a possibility Gemini could make up lost ground by expanding its international presence — a flex as U.S. regulators intensify a crackdown on the crypto industry.

Reality check: Gemini has licenses to operate in 60-plus countries, but it's a predominantly U.S. business. That arm has suffered setbacks over the last 12 months, with the SEC's lawsuit against Gemini and its lending partner, Genesis.

• Both companies are exchanging blows in a contentious bankruptcy proceeding, but are in the middle of ironing out a bankruptcy plan.
• Part of that contention is found in Cameron Winklevoss' open letters to Barry Silbert, CEO of Digital Currency Group, parent company of Genesis. That culminated in Gemini suing DCG and Silbert in July.

Zoom in: And their U.S. business would appear to be on a downward trend, per three charts from data research firm Kaiko.

Gemini used to be one of the big ones, competing with the likes of Coinbase and Kraken in the U.S. — in July 2017, it commanded 26% of trading volumes, compared to 44% for Kraken and 30% for Coinbase.

Driving the news: Over time, with the entrants of new competitors like Binance.US, Gemini's market share has dwindled down to roughly 1%, according to Kaiko.

Stablecoin issuers make revenue on the assets backing their dollar-pegged coins, so, it stands to reason that an exchange would want its stablecoin to be used more than less — that could be achieved through more trading with them. (Binance has historically been able to boost a stablecoin by cutting fees)

• CoinGecko ranks GUSD as the 11th largest stablecoin.
• Only Gemini's GUSD was often used less than actual dollars — USD-BTC and USD-ETH pairs regularly have shown 100X to 300X more volume than the exchange's native stablecoin.
• Of note: It's not used all that much elsewhere, either.

Gemini looked poised to enter the realm of DeFi by partnering with the central bank of that realm, MakerDAO.

• Only the DAO voted to break up with Gemini in June, cutting its own stablecoin DAI's ties with Gemini's GUSD.