Coinbase Sued by Customers Who Lost ‘Untold Millions’ to Little-Known Crypto Project: Report

Coinbase Sued by Customers Who Lost ‘Untold Millions’ to Little-Known Crypto Project: Report

Major US crypto exchange Coinbase has reportedly been sued for providing exchanges for GYEN, a coin intended to act as a stablecoin pegged to the Japanese yen.

According to a complaint seen by Bloomberg, Coinbase is accused of misleading customers into believing that GYEN was equal to the price of one yen.

After overwhelming buying pressure, GYEN lost its peg to the yen as it fell from $0.008 on November 13 to $0.04 on November 18, before abruptly returning to parity on November 24.

According to Bloomberg, some investors on Coinbase misunderstood that the token was not trading on par with the yen and was designed to drop drastically to reach its peg.

The complaint states,

“Investors placed orders thinking the value of the coin was, as advertised, equal to the yen, but the tokens they were buying were worth up to seven times as much as the yen… Just as suddenly, the value of GYEN dove ankle deep – 80% drop in one day.”

Coinbase also froze trading amid the volatility, which prevented GYEN holders from being able to sell their coins, resulting in losses of “untold millions within hours,” according to the complaint.

Said a group of GYEN investors leading the lawsuit,

“[Due to] the omission that GYEN was not designed to hold yen-pegged value, and Coinbase’s restriction prohibiting investors from liquidating their GYEN as it plummeted, several hundred buyers lost money. huge sums, with some losing hundreds of thousands of dollars in just a few hours, causing them grief, anxiety, stress and outrage.

On Nov. 19, Coinbase said the crypto exchange stopped activities involving GYEN and Power Ledger (POWR) for technical reasons.

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Feature image: Shutterstock/Tithi Luadthong

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