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Coinbase is facing class action lawsuits related to TerraUSD

A class-action lawsuit was filed against Coinbase on Thursday claiming the exchange was negligent in listing stablecoin TerraUSD and alleging that it failed to disclose its financial relationship with Terraform Labs.

This is the second class action lawsuit against Coinbase. A lawsuit was filed last month regarding the GYEN event in November.

Learn What is TerraUSD ? why does it lose peg

Thursday’s lawsuit alleges Coinbase was negligent in not conducting due diligence on Terraform Labs prior to listing TerraUSD and misrepresenting TerraUSD’s risk as an algorithmic stablecoin. The lawsuit compares information on stablecoins provided by trading platforms Robinhood, Gemini, and Kraken with that of Coinbase and concludes that “Rather than revealing TerraUSD’s nature is decentralized, controlled by a single entity. algorithmic and high-risk, Coinbase adopted it as another stablecoin.

The lawsuit also claims Coinbase Ventures, the company’s investment fund, is one of Terraform Labs’ biggest backers, and that’s part of the reason the company doesn’t disclose TerraUSD’s volatility.

The plaintiffs in the case are being represented by the law firms Milberg Coleman Bryson Phillips Grossman and Erickson Kramer Osborne. Cong is also representing plaintiffs in a lawsuit filed against Coinbase and Trust on May 13 related to reliance on the Japanese yen-pegged stablecoin GYEN in September. 11.

Coinbase is alleged to have engaged in negligent misrepresentation and failed to use reasonable care in listing GYEN despite the foreseeable risk of dependence.