Coinbase customers are outraged after a technical issue on the platform caused the company to freeze accounts for weeks. Customers were unable to access thousands of dollars in funds for weeks, and some still don’t have access.
The incident happened when customers on Coinbase could purchase GYEN, a Stablecoin linked to the value of one Japanese yen. Stablecoins are marketed as being linked to external assets like fiat currencies to avoid the extreme price volatility of other cryptocurrencies.
In mid-November, GYEN became unlinked from the price of the yen. It reached a high of $0.065643, nearly 7.5 times more than the fiat equivalent investors expected. If you had a position in GYEN, were you able to take some profits during the massive spike?
The coin’s price crashed, and it’s currently trading at the yen peg level that was originally planned. It’s unknown how many customers were able to secure the bag and sell GYEN before it plunged, or how many lost money.
In an email sent to customers, Coinbase said between November 15-19, GYEN experienced “unexpected behavior due to unusual market conditions. On November 19, this was further complicated and, for technical reasons, Coinbase disabled trading for GYEN.” Customers were unable to buy, sell, trade, send, or receive the coin — they said Coinbase held their money ransom.
Many customers still don’t have access to their funds in GYEN. One customer claimed they attempted calling Coinbase’s customer support but hung up after nearly three hours. They said they needed access to nearly $4,800 they put into GYEN.
The issue shows the risks of investing in budding cryptocurrency marketplaces. It also shows that Stablecoins are not necessarily stable at all.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.