Coinbase Feels The Heat Of The Law, Under A Scanner For TerraUSD Promotion
Coinbase, the digital currency wallet and trading platform has invited the wrath of the law enforcement agencies and is under a scanner for its promotion of TerraUSD (UST) crypto which collapsed last month. A lawsuit claimed that Coinbase failed to caution the investors about the risks associated with investing in TerraUSD.
Coinbase Feels The Heat Of Meltdown of TerraUSD (UST) And Luna
The reverberation of the shocking meltdown of TerraUSD (UST) and Luna is being felt across the crypto sector and many entities which were related to them have come under the scanner. UST was pegged to the US Dollar but it broke the one-on-one peg leading to Luna dropping to zero.
A lawsuit which has been filed alleges that Coinbase has misled investors to believe that they were investing in a “reserve-backed stable coin,” a type of digital assets which is generally less volatile than its counterpart.
Coinbase Misled The Public
The lawsuit also alleges that the crypto asset was promoted in a way that the investors believed it eliminated volatility. The truth is that in reality TerraUSD is not backed by the actual US Dollars or any other tangible assets held in the reserve. The devaluation of the TerraUSD led to huge losses to the investors and enthusiasts to the tune of around $18 Billion in a couple of days. The speed of the crash was so fast that no remedial action could be taken to limit the losses.
Coinbase has been hit by a lawsuit for the second time. In May a lawsuit was filed against the wallet pertaining to the GYEN’s de-pegging last November.
The crypto sector is going through a hellish period and most of the top crypto coins are bleeding. However the TerraUSD Crash has outraged many crypto enthusiasts and the current crypto carnage can be attributed to the Terra Crash to a large extent. The market is going through its worst bearish phase and the Number One and Number Two Crypto assets are changing hands at a price which a pale resemblance to their All-time Highs.