Coinbase is sued for promoting TerraUSD

On Thursday, a class action lawsuit was filed against the cryptocurrency exchange Coinbase in the Northern District of California for promoting the UST stablecoin.

The lawsuit claims that Coinbase failed to disclose the risks inherent in TerraUSD and misled the plaintiffs into believing that they were buying a stablecoin with a backup.

Because TerraUSD was supposedly pegged to the US dollar, the world’s reserve currency, it was positioned as a type of investment that virtually eliminated volatility. In reality, TerraUSD is not backed by US dollars or any other tangible assets.

The complaint also claims that investors lost about $ 18 billion in a few days in May due to the devaluation of TerraUSD. The lawsuit was filed by the law firm Milberg Coleman Bruson Phillips Grossman.