• After trading the stablecoin gyen, Coinbase (NASDAQ) faces a legal battle.
• They are alleging the stablecoin’s issuer, GMO-Z Trust and Coinbase described the gyen as pegged 1:1 in value to the Japanese yen.
• Coinbase shut down trading and placed a freeze on customer accounts.

Coinbase is staring a lawsuit in the eye after customest alleged that they suffered losses amounting to millions of dollars over the crypto exchange’s role in trading and promoting the gyen stablecoin.

Hussies Kassfy and Kenneth Donovan filed the potential class-action suit on Tuesday. They accuse the US’s largest crypto exchange of deceiving customers about the stability and viability of the gyen.

They are alleging the stablecoin’s issuer, GMO-Z Trust and Coinbase described the gyen as pegged 1:1 in value to the Japanese yen, even though they were aware of the fact that the peg was prone to break. According to the suit, investors weren’t provided with this information by those involved.

Coinbase was trading the Ethereum-based Gyen very soon. It lost its peg within a matter of minutes.

Coinbase then decided to close customer accounts and stop trading the stablecoin. Coinbase cited unusual market conditions and technical problems as reasons for this decision.

The complaint stated that “investors placed orders believing the coin’s value was, as advertised, equal to the yen, but the tokens they were purchasing were worth up to seven times more than the yen.”

The complainant added to this when he said that “just as suddenly, the gyen’s value plunged back to the pag, falling 80% in one day.”

To make things even worse, “as the gyen’s va;lue was cratering back to the yen, Coinbase compounded the harm by restricting many customer’s ability to sell the asset, then abruptly suspended all trading of the asset without explanation.”

GMO-Z Trust is listed as a defendant in the case alongside Coinbase Global Coinbase Inc. was named in the suit, filed in Northern California district court.

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