Customers sued Coinbase for listing fake GYEN stablecoin

The lawsuit says the token, which is pegged to the Japanese yen, collapsed by 80% the day after trading began

14.05.2022 - 08:30

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What’s new? Coinbase customers from the US have filed a class action lawsuit against the cryptocurrency exchange for posting a fake GYEN stablecoin. According to the lawsuit, the price of the token, which is pegged to the Japanese yen, collapsed by 80% the day after trading began, Bloomberg reports. The plaintiffs allege that the issuer of the GMO-Z stablecoin misled about the stability of the coin, resulting in investors suffering losses of millions of dollars.

Bloomberg’s material

Details of the case. In November 2021, investors placed orders on the exchange, believing that the value of the coin, as advertised, would be equal to the yen. But the tokens they bought were worth seven times the value of the Japanese currency, and a day later their exchange rate dropped by 80% from its original level.

Coinbase then suspended trading of the stablecoin, which “exacerbated the harm already caused by denying customers the opportunity to sell the asset,” the investors claim. The plaintiffs intend to represent all GYEN buyers, but do not specify how much compensation they demand.

What happened before? In early May, Coinbase published its report for the first quarter of 2022. According to the document, the company’s losses during this period amounted to $430 million, and the exchange’s total trading volume fell by $238 billion.

Also, self-proclaimed Satoshi Nakamoto Craig Wright sued crypto exchanges Coinbase and Kraken for trading “fake” bitcoin. He claims that the platforms sell another asset under the ticker symbol BTC under the guise of real bitcoin. According to the entrepreneur, Bitcoin Satoshi Vision (BSV) can be considered the only cryptocurrency that has fully implemented the original Bitcoin protocol.

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