Topic: Coinbase sued in connection with promotion of TerraUSD cryptocurrency (Read 158 times)

The result of this would be interesting. If this legal proceeding ends up in favor of the law firm that filed the lawsuit, this might snowball into a bigger problem which involves a lot, if not all, crypto exchanges around the world.

This might become a precedent for future cases against crypto exchanges not just for listing stablecoins which claim to have enough reserve but also for listing thousands of other coins that are even more questionable than TerraUSD.
 
But whatever happened to caveat emptor? Surely, Coinbase is not offering outright scams to its customers with the assurance that they are all legit. I don't think they lack disclaimers and warnings of risks. Definitely, the standard of admission for coins is not so high. If it were so, Coinbase wouldn't have admitted almost all of them. But responsibility isn't exclusive to Coinbase.

I think they're not aware of the actual intention of that team as they enlists it on their platform. They even made a wrapped version of it or it's the one that they've accepted when the fiasco has been seen gaining popularity.
They should be diligent upon supporting projects and this is entirely for all the exchanges out there, including big and small because they have an important role to play for the sake of their users.

well... i guess as someone else pointed out.. america is the place where people sue for silly things like mcdonalds coffee being too hot or that a retail store tries to sell pink toys to girls and blue toys to boys. where any unhappy experiences/thoughts are suable offenses to some idiots..

im more of the generation where putting a hand on the shoulder is not rape/sexual.. but it seems i forgot we are in the era where just smiling at someone is a sexual assault(harassment) and worthy of a court case

Definite coinbase, must complete TerraUSD due diligence, at Terraform Labs before registering and trading on Coinbase, basically, TerraUSD has high risk, because TerraUSD is controlled by only one entity.

The lawsuit against Coinbase by MCBPG on the grounds of protecting its clients from the risk of TerraUSD, as they have mainly compared stablecoins with other crypto trading platforms, In my opinion Coinbase is not a failure and negligence in this regard, I think this is another element why Coinbase is due diligence on TerraUSD, It's clear that TerraUSD already has a number of downsides for investors.

If Coinbase doesn't ignore suggestions and criticisms of TerraUSD, I think Coinbase is safe and not being sued as it is today, actually they know the dangers of TerraUSD in some cases, especially in the investment field and the volatility of TerraUSD has disappeared.

I agree with @OgNasty personally.

Does it really matter that they are not licensed from anything?
So why are some YouTubers being sued for promoting scams on their channel, for giving "financial advice" and for claiming to be "experts" in this niche? Telling watchers to buy the flower (shitcoin) of the week because it will be worth millions asap lol.

I don't remember any recent examples, at least not in the US, but remember onecoin for example. Some promoters have been sued. In the old time, the same was valid with Herbalife or TelexFree or not long ago with bitconnect or trafficmoonson. I didn't read the news about it but it appears Elon is sued, so it's possible to prosecute a person. Take the example of market manipulation, I don't think you need to be licensed to be sued in justice. See with Kim Kardashian and Floyd Mayweather about EthereumMax

If they focus their efforts on proving that $LUNA is a scam project or know that its algorithm will fail at some point and do not make any efforts to close such loopholes, they may find cooperation from the judicial system, but attacking Coinbase is like trying to accuse Robinhood in GameStop stock case.
There were some warnings in this tweet

https://twitter.com/freddieraynolds/status/1463960623402913797

Date: 9:59 PM · Nov 25, 2021·Twitter Web App

It can only be investigated if an investigation was opened about Luna and it was proven that there was a price manipulation with the help of some Coinbase, but until that time they have nothing legal against the platform.

Well, it's the country where you sue McDonalds because the coffee is hot.
I don't think they care whether they have a solid case or not. I think that all they want is to squeeze some dollars off Coinbase. I think that they hope for a quick settlement and that's all.

I doubt they will win this case against Coinbase, but I am considering this exchange to be very high risk now, ever since they said they could take away users funds to save themselves from going bust.
Everyone knows that dealing with shitcoins is even more risky, and I could say the same for all stable coins including Tether, USDC and all others.
I think that TerraUSD was algorithm based stable coin that makes it highly unstable and tied to it's based coin.

Good lawyers can always find some holes in contracts and terms of use, but it's not easy to track everything with rate Coinbase listed all the shitcoins.

elon and saylor are not licenced financial advisors. so they are not liable for their personal opinions being classed as financial advice. (Fiduciary)
they also were not the ones offering an exchange where people bought from them which comes with terms conditions policies and regulations..  

however coinbase is a Fiduciary ... a financial service selling and promoting products which customers believed to be true to coinbases advertising

The lawsuits are going to come fast and furious now.  Elon being sued for promoting Dogecoin (he tweeted last night that he will continue supporting it, likely as evidence against his case), Coinbase sued for promoting TerraUSD...  I'm sure every exchange that offered that garbage will be sued by thousands of individuals.  I'm just waiting for Saylor to get sued for telling everyone to mortgage their house to buy BTC above $60K, or him and Samson Mow being sued for saying Bitcoin will go up forever right at the top.  I wouldn't be surprised if these people were dumping all they could while telling you to give up everything you own to be their exit liquidity.  One thing I'm certain of, there will be more lawsuits.

its stuff like this where everyone needs to ensure newbie users of bitcoin do not also take the "bitcoin market cap" as a mis-conceived notion to think the market cap means bitcoin has billions of dollars backing bitcoin.

i have read hundreds of posts over the years where people stupidly think the bitcoin market cap is the value, whereby then it (the cap) then determines the price per coin(not the case in reality.. reality is the other way round) based on the stupid assumption there is some multi-billion dollar reserve valuing bitcoins market cap.

as for terra.. whether they try to play the game of "we never said backed we said pegged". still infers a promise of value of 1:1 ratio. and a trust of value that usdt would be worth $1 for 1usdt

a true peg never has a market rate that changes.. its like how paypals account balance of $ on their MySQL database is pegged/backed to real $ of bank deposits/withdrawals USD
(well most hope that paypal keeps all bank deposits of real USD in reserve and hasnt fractional reserved it.. )


anything that is supposedly backed or pegged. should not have a market order book that even offers an option to buy it for less or more even by 1 cent difference. it should be a straight conversions/swap/withdraw on redemption of 1 for 1

anything that calls itself "backed or pegged" at a fixed value but then has a exchange market order book that offers prices above or below it.. is obviously at risk of falling out of the peg. so be warned

..
pegged means the swap value will be Y for X.. which is fixed. AKA 1000msat for 1 sat
backed means there is the Y of X .. where X is stored somewhere and kept safe EG 1sat locked for each 1000msat

so be warned if altnets and sidechains and situations which offer a pegged or alternate token for something else that may be backed or not, might change their rules

take grey scale shares. each day they deplete in their peg between how many shares you get for your coin you use to buy the shares. and after you bought them your shares deplete each day which they call their 'fee'

They have zero chances of getting anything and they know it


They are clinging to definitions on the front webpage and ignoring everything in the terms and conditions and the legal page, unfortunately for them, it has the same chance as suing Heineken not making you instantly party on a yacht-like in the advertising.

From the tl;dr side of life. The main question is did they do anything besides list it and give a basic description?
As far as I have seen, Coinbase lists a lot of things and just gives a basic description that is basically a copy of the whitepaper and then tags on the DYOR warnings.

Everyone with at least 1 functioning brain-cell could see it was a scam from miles away. But then again so could people who looked at Nikola a couple of years ago and Medallion Financial since 2018 and so on. But greed will make people stupid(er).

-Dave

It's strange the site you linked doesn't seem to suggest any evidence except the court filing, it'd be interesting to see the specifics at a glance (mainly the terminology used to say it was backed by usd).

It was backed by luna and they could probably argue it from that angle, but not if they said it was directly backed by the dollar or fully collateralised (it might've been fractionally/partially reserve backed though at the time of Coinbase's claim too).

I have found this not so good news for Coinbase, there is not much information about it, however the lawsuit accuses Coinbase of not disclosing the risks inherent in TerraUSD and of misleading the plaintiffs and the class to believe that they were buying a "reserve backed stablecoin".



Because TerraUSD was allegedly pegged to the currency issued by the US government.

The document says, and adds that:

Source: https://www.theblock.co/post/152942/coinbase-sued-in-relation-to-promotion-of-terrausd-cryptocurrency?utm_source=cryptopanic&utm_medium=rss