Another stablecoin lost its peg, Coinbase was sued

On May 13, Kenneth Donovan and Hussien Kassfy filed a lawsuit against Coinbase – the exchange electronic money largest in the US, together with GMO-Z – the issuer of GYEN coin, for allegedly keeping investors quiet despite knowing the anchor rate of the company in advance. token This is very easy to break.

Coinbase sued for stablecoin GYEN losing its peg illustration

November 2021, when Coinbase exchange begins to allow trading, the token is based on Ethereum lost its peg, causing its price to rise several times against the yen before turning sharply lower. In light of the instability of GYEN, the exchange proceeded to freeze customer accounts and disable related transactions, citing technical reasons and abnormal market conditions.

The lawsuit filed by Donovan and Kassfy says they bought the token for seven times the value of the yen, before it suddenly plummeted back to its original rate, representing an 80% drop in 24 hours.

“When the GYEN value returned to the pegged level, Coinbase increased the damage by limiting the ability of many customers to sell assets, abruptly suspending all relevant transactions without providing an explanation. satisfactory”, quote the lawsuit.

As a result, GYEN investors have “lost millions of undisclosed dollars” in just a few hours, and they are claiming damages.

Donovan said he spent about $335,000 to buy 38 million tokens, but he knew that GYEN lost its lock and quickly dropped 80% within a few hours of matching, and Kassfy bought 13 million tokens for about $118,000. and 40% loss.

GMO-Z Trust, Coinbase Global and Coinbase Inc have all been named in the lawsuit filed in the Northern District Court (USA).