Top US crypto exchange Coinbase is reportedly being hit with a lawsuit for providing trading for GYEN, a coin meant to act as a stablecoin pegged to the Japanese yen.
According to a complaint seen by Bloomberg, Coinbase is being accused of misleading customers into believing that GYEN was equal to the price of one yen.
Track live crypto price of 10000+ coins!
After overwhelming buy pressure, GYEN lost its peg to the yen as it rose from $0.008 on November 13th to $0.04 on November 18th, before sharply returning to parity on November 24th.
According to Bloomberg, some investors on Coinbase didn’t understand that the token was not trading equal to the yen and was designed to come down drastically to reach its peg.
The complaint states,
“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% in one day.”
Coinbase also froze trading amid the volatility, which prevented GYEN holders from being able to sell their coins, leading to losses of “untold millions in a matter of hours,” as per the complaint.
Says a group of GYEN investors spearheading the lawsuit,
“[Due to] the omission of the fact that GYEN was not designed to hold a value pegged to the yen, and Coinbase’s restriction prohibiting investors from liquidating their GYEN as it plummeted, several hundred purchasers lost vast sums, some losing hundreds of thousands of dollars in just hours, causing them grief, anxiety, stress, and outrage.”
On November 19th, Coinbase said the crypto exchange halted activities involving GYEN and Power Ledger (POWR) due to technical reasons.
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Tithi Luadthong
Download MAXBIT Android App, Your best source of all crypto news!
Share this article: