Investors have accused the cryptocurrency exchange Coinbase and GMO-Z Trust of providing misleading information regarding the GYEN stablecoin pegged to the Japanese yen. The class-action suit was filed in a federal court in Northern California, Bloomberg reports.
Investors assert that they lost “millions of dollars,” as Coinbase and GMO-Z Trust promoted GYEN as a stablecoin. According to them, after trading began on the platform in November 2021, it immediately lost its peg to the yen.
“Investors placed orders believing that the asset’s value, as advertised, was equivalent to the yen. But the tokens they bought were priced as much as seven times the yen. The price of GYEN then fell to parity with the Japanese currency,” the suit states.
When the asset’s price fell, Coinbase paused trading, limiting traders’ ability to cut losses. As a result, investors collectively lost millions of dollars in a matter of hours.
The plaintiffs seek damages.
GMO-Z Trust is affiliated with the Japanese tech giant GMO Internet. In December 2020 the company obtained a license NYDFS to issue stablecoins pegged to the yen and the US dollar.
Back in May 2022, the self-styled creator of digital gold Craig Wright accused Coinbase and Kraken of trading ‘fake’ bitcoin.