Customers of Coinbase have sued the exchange for promoting and trading GYEN, a defunct stablecoin. The lawsuit targets both Coinbase and the issuer of the GYEN stablecoin, which turned out to be anything but stable, according to a report published earlier today.
Customers of Coinbase filed a class-action lawsuit in federal court in northern California Wednesday. The lawsuit claims that Coinbase and GMO-Z.com, the token’s issuer based in Tokyo, deceived investors about the token’s stability. As a result, millions of dollars were lost by investors.
GMO-Z.com released GYEN with a 1:1 peg to the Japanese yen, according to the complaint. However, after Coinbase debuted and began trading GYEN in November of last year, its value fell below that of the Japanese yen.
Following the crash, Coinbase stopped allowing users to trade GYEN.
The exchange banned GYEN trading after the 80 percent drop. According to the complaint, the exchange compounded the damage by denying clients the ability to sell the asset. GYEN holders on Coinbase lost millions in a matter of hours as a result.
The plaintiffs in the action want to represent all GYEN shareholders. They did not, however, disclose the amount of compensation they are seeking.
GYEN is currently trading at $0.007732 at the time of writing. This sum is equal to the current value of the Japanese yen against the US dollar.
This announcement follows the release of Coinbase’s Q1 2022 earnings report. According to the report, the exchange’s net revenue dropped 53% to $1.165 billion. The exchange also suffered a $430 million net loss.
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