Customers sue Coinbase for promoting and trading the GYEN token | CryptoSlate

CryptoSlate

Coinbase customers have sued the exchange over the promotion and trading of GYEN, a stablecoin that crashed. A report unveiled this news earlier today, noting that the lawsuit targets both Coinbase and the issuer of the GYEN stablecoin, which turned out to be anything but stable.

According to the report, Coinbase’s customers filed a class-action lawsuit yesterday in a federal court in northern California. The lawsuit alleges that Coinbase and Tokyo-based GMO-Z.com, GYEN’s issuer, misled investors about the token’s stability. As a result, investors incurred losses worth millions of dollars.

How To Get Free Crypto  

The complaint pointed out that GMO-Z.com issued GYEN with a 1:1 peg to the Japanese yen. However, GYEN’s value slipped below that of the Japanese yen in November last year after Coinbase listed and started trading it.

The complaint further noted that,

“Investors placed orders believing the coin’s value was, as advertised, equal to the yen, but the tokens they were purchasing were worth up to seven times more than the yen. Just as suddenly, the GYEN’s value plunged back to the peg — falling 80 percent in one day.”

Coinbase prevented customers from trading GYEN after the crash

Following the 80% crash, Coinbase halted GYEN’s trading. The complaint alleges that the exchange exacerbated the harm already caused by denying customers the opportunity to sell the asset. As a result, GYEN holders on Coinbase lost millions in a few hours.

The investors that filed the lawsuit asked to represent all GYEN investors. However, they did not specify the amount of compensation they seek.

At the time of writing, GYEN is trading at $0.007732. This amount is equivalent to the level the Japanese yen is trading against the U.S. dollar.

Coinbase Banner  

This news comes after Coinbase recently published its Q1 2022 earnings report. The report detailed that the exchange’s net revenue plunged 53% to hit $1.165 billion. Coinbase also recorded a net loss of $430 million.

Moreover, Sophia Zaller, a crypto underwriter at Relm Insurance, discovered a bankruptcy disclosure statement in the report. The statement noted that Coinbase could treat customers as general unsecured creditors in the event of bankruptcy. Zaller added that this is a red flag.

As a result, investors started moving their funds off the exchange resulting in a sharp drop in COIN’s price.

Go to Source
Author: Jinia Shawdagor


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.