Coinbase Promote “Fake” Stablecoin 

Customers of Coinbase have filed a lawsuit against the exchange for the trading and advertising of GYEN. The GYEN was presented as a stablecoin which later saw a price decline. According to a recent report, the lawsuit is directed at Coinbase as the GYEN’S issuer.

According to the allegations made in the lawsuit, investors bought GYEN with high hopes that the value was fixed to that of the Japanese Yen. However, the price spiked by seven times before falling by 80%.

As per the source, users of Coinbase filed a lawsuit in a California federal court. According to the allegations made in the complaint, Coinbase and GMO-Z.com, a Tokyo-based company that issued the token, deceived investors about the stability of the token. This caused investors to sustain losses worth millions of dollars.

GMO-Z.com had launched GYEN with a fixed exchange rate of 1:1 with the Japanese Yen. In November 2021, after Coinbase launched it and started trading, the value dropped below the Japanese Yen.

In addition, the lawsuit alleged that,

“Investors made orders under the impression that the token’s value was, as stated, equivalent to the price of the Yen. However, the tokens were higher in value than the Yen. As quickly as it had risen, the value of the GYEN plummeted below the peg, losing 80% in a day.”

Coinbase Prohibited Users From Trading GYEN During Crypto Market Meltdown 

Due to the 80% drop in value, Coinbase decided to cease GYEN’s trading. According to the allegations in the lawsuit, the exchange is responsible for exacerbating the damage caused by stopping clients from selling them when the price drops. Coinbase users who had GYEN at the time saw a loss of millions of dollars in a few hours. 

Those who filed the lawsuit have not yet asked for compensation. At the time of writing, one GYEN token can be purchased for $0.007732. This value is comparable to what the Japanese Yen is trading in relation to the United States dollar.

This news is coming after Coinbase has just issued its financial report for the first quarter of 2022. According to the research findings, the stock market’s net revenue dropped by 53% to reach $1.165 billion. However, Coinbase had a net loss of over 430 million dollars.

In addition to this, Sophia Zaller, who works as a cryptocurrency underwriter for Relm Insurance, found a bankruptcy statement inside the report. Coinbase might regard its clients as general creditors who were not secured in a situation where the company declares bankruptcy, according to the statement. Zaller said this is a warning sign.

Due to this, investors quickly removed their money from the exchange, which led to a steep decline in the price of COIN.

---

Best Forex World is not responsible for the content, accuracy, quality, advertising, products or any other content posted on the site. Some of the content on this site (not all) is paid content that is not written by our authors and the views expressed do not reflect the views of this website. Any disputes you may have with brands or companies mentioned in our content will need to be taken care of directly with the specific brands and companies. The responsibility of our readers who may click links in our content and ultimately sign up for that product or service is their own. Cryptocurrencies, NFTs and Crypto Tokens are all a high-risk asset, investing in them can lead to losses. Readers should do their own research before taking any action.

---