Coinbase hit with lawsuit over Terra mishap


TL;DR Breakdown

  • Coinbase slammed with lawsuit over Terra mishap
  • Investors blame the exchange for the losses
  • Coinbase is battling GYEN related lawsuit

Coinbase has yet again been slammed with another lawsuit due to the issues emanating from the mishap suffered by Terraform Labs. According to the filing details, the company failed to alert users that it had a standing relationship with LUNA’s parent company, Terra. Investors are also aggrieved that the crypto exchange did not act swiftly to help them curtail the losses they suffered when the issue started.

Investors blame Coinbase for losses

According to reports, this is the second lawsuit the company will be looking to challenge, with the first coming some weeks ago. The first one involved aggrieved GYEN token holders seeking compensation over the role of Coinbase when the token was depegged last year. The lawsuit submitted at the court on Thursday mentioned that the company failed to conduct thorough research before supporting the listing of TerraUSD.

Some investors also claimed that the company could not accurately spell out the risks that came with buying and trading the stablecoin correctly on its platform. The investors mention that, unlike other platforms which spelled out the ideal dangers that users were open to, Coinbase only informed its users that the stablecoin was just like the others in the crypto market.

The exchange is battling GYEN related lawsuit

The listing details also pinpointed Coinbase Ventures as one of the strongest companies offering support for Terraform Labs. The said arm of the company is charged with making high-value investments to make profits. Investors mentioned that this relationship was one reason that Coinbase failed to alert users of the high risks involved in buying and trading the stablecoin. The aggrieved investors are being represented by legal entities across three firms in the United States of America.

One of the law firms is also part of the legal team representing investors in their quest to force the company to pay compensations to investors of the GYEN stablecoin. The investors started complaining after the value of the said stablecoin rose as high as possible before going under drastically. This led to the company putting a limit and suspension on accounts belonging to some users on the platform. According to the lawsuit, some users suffered heavy losses as a result of the depegging that happened.

Owotunse Adebayo

Owotunse Adebayo

Adebayo loves to keep tab of exciting projects in the blockchain space. He is a seasoned writer who has written tons of articles about cryptocurrencies and blockchain.

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