A digital currency wallet and trading platform Coinbase had faced a class-action lawsuit filed mid-week, in California Northern District Court in relation to its promotion of TerraUSD (UST) crypto which collapsed last month.
The lawsuit alleges that Coibase failed to reveal the risks associated with TerraUSD and misled the class and plaintiffs into believing that they were actually buying a “reserve-backed stablecoin,” a section of digital assets which is generally less volatile than its counterpart.
The recent shocking meltdown of TerraUSD (UST) and Luna left the community in shock. UST was pegged to the US Dollar but it broke the one-on-one peg leading to Luna dropping to zero.
The filing highlighted that it was marketed as a type of investment that can digitally eliminate volatility/ And that in reality TerraUSD is not backed by the actual US Dollars or any other tangible assets held in the reserve.
Furthermore, it signifies that the investors and enthusiasts lost around $18 Billion in a bunch of days last month, all due to the devaluation of TerraUSD.
This is the second class-action lawsuit that Coinbase has witnessed. Earlier in May, a lawsuit was filed related to GYEN’s de-pegging last November.
Although the entire crypto-sphere has witnessed a lot of bearish trends lately, this instance of the TerraUSD crash was a major one. Currently, the market is seeing high volatility with major crypto assets like Bitcoin (BTC) and Ethereum (ETH) down by significant percent compared to their All-time Highs.
As of writing, the flagship crypto-asset Bitcoin (BTC) is exchanging hands at $19,601 with a market of $373,833,182,276 and is up by around 1% in the last twenty-four hours.
Whereas the second largest crypto asset Ethereum is trading at $1,044 with a market cap of $126,640,805,207 and is up by around 5% in the last twenty-four hours.