Cryptobros are taking Coinbase to court for its role in promoting and trading the “stablecoin” GYEN. GYEN is a stablecoin running on Ethereum that’s intended to maintain a value of one Japanese Yen.
Outraged customers of Coinbase say the company has locked them out of their accounts after “technical reasons” forced it to halt trading GYEN. Reminds me of the Ripple (XRP) I’m still holding.
According to the complaint, “investors placed orders believing the coin’s value was, as advertised, equal to the yen,” but noted the tokens they were purchasing “were worth up to seven times more than the yen.”
They added that just as suddenly as their purchases were made, “the GYEN’s value plunged back to the peg — falling 80 percent in one day.”
The lawsuit came a day after Coinbase (COIN) shares and bonds plunged to new low trading at $44.35, signaling investor skepticism about the prospects of the crypto exchange in a worsening bear market.
The complaint goes on to state 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.
Due to this restriction, several hundred purchasers lost vast sums, some losing hundreds of thousands of dollars in just hours. The users allege this caused them “grief, anxiety, stress, and outrage,”
Stablecoins such as Dai and Tether were designed to be only as volatile as the US dollar, and have values that typically change much less than those of Bitcoin and Ethereum.
Who knows what the future of crypto is while the market seems to have recovered a little bit. There is speculation that this is just the “dead cat bounce” before the real crash.
What do you think? Is the latest crash a sign of an even bigger future crash? Sound off in the comments!
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