Coinbase is facing class-action suits over unstable stablecoins GYEN, USTC
2022.06.20 02:51
Coinbase is facing class-action suits over unstable stablecoins GYEN, USTC
A class-action suit was filed against Coinbase (NASDAQ:COIN) on Thursday, claiming the trading platform was negligent in its listing of the TerraUSD Classic (USTC) stablecoin and alleging that it failed to disclose its financial relationship with Terraform Labs. This is the second class-action suit outstanding against Coinbase. A suit was filed last month in connection with the depegging of GYEN (GYEN) in November.
Thursday’s suit alleges that Coinbase was negligent for failing to conduct due diligence of Terraform Labs before it listed USTC and misrepresenting TerraUSD Classic’s risk as an algorithmic stablecoin. The suit compares the information on stablecoins provided by trading platforms Robinhood (NASDAQ:HOOD), Gemini and Kraken to that of Coinbase and concluded that “Rather than disclose the nature of TerraUSD as uncollateralized, controlled by an algorithm, and highly risky, Coinbase passed it off as just another stablecoin.”
