Rug pulls are a common phenomenon in the cryptocurrency markets. One such incident happened with a scam token project called GYEN. The GYEN project gained a massive price momentum before crashing down to near zero in a sudden swoop. The unlucky investors of the scam tokens are trying to find some relief for their losses by finding the culprit behind the situation.
To this end, some former GYEN token holders have filed a lawsuit against Coinbase. Coinbase is the largest cryptocurrency exchange operating out of the USA. The complainants claim that Coinbase presented the GYEN token as a project that was backed by the Japanese Yen. Before the price of the GYEN token crashed by 80% it soared 7 times.
Coinbase Faces Severe Backlash from its Consumers
At present, the FUD sentiment of the cryptocurrency market is running strong following the fiasco of the UST failure and crash. Many investors are worried about the stability of other stablecoin projects. However, the investors at Coinbase assume that the exchange is going to vet any token project properly before listing or advertising it for its exclusive consumer base.
The lawsuit is bad news for Coinbase considering its stock performance on the market is already tumbling. The bad press that comes with this lawsuit can deepen the blow of financial injury for Coinbase.
A big worry for Coinbase management is the fact that GYEN investors have filed a class-action lawsuit against the cryptocurrency organization. There are already rumors about Coinbase bankruptcy making rounds on social media platforms warning people about shifting their crypto reserves out of the platform beforehand.
The class-action lawsuit to address the matter of GYEN stablecoin rugpull is currently under the jurisdiction of a Federal court in California. Both Coinbase and GYEN issuer GMO-Z can get implicated.
The plaintiffs argue that Coinbase participated in false and misleading advertising of the token. Furthermore, the investors claim that they were placing GYEN token orders under the impression that its value will remain 7 times higher in comparison to the Japanese yen.
Coinbase management delisted the controversial stablecoin soon after its crash. The investors of the GYEN token allege that Coinbase policies exacerbated the financial losses by halting the GYEN trade after an 80% retraction.
The GYEN stablecoin fiasco resulted in investors losing millions of dollars in a matter of a few hours.