Coinbase users are unhappy with the company after a technical problem had some accounts frozen for weeks, which could’ve led to large losses, CNBC writes.
Coinbase blamed the incident — a glitch in trading two cryptos — on “technical reasons,” but users are angry now because they allege the company improperly took their funds.
The issue started in mid-November when Coinbase customers became able to buy the stablecoin GYEN, which is pegged to the value of one Japanese yen. POWR, a crypto used in energy trading, was involved too.
Around Nov. 17, GYEN somehow became unhinged from the yen price it was supposed to be matched with, jumping to a high of around 7.5 times higher than the fiat equivalent. Trader activity on Coinbase began going up on Nov. 18, and ended up peaking at $122 million.
The CNBC report says it’s unknown how many customers were involved and how many suffered losses. But the coin has been back at its intended yen peg level.
Because of the trouble, Coinbase ended up temporarily disabling buys, sell, trades, sends and receives of GYEN and POWR.
CNBC writes that the dispute is an example of what happens when investors pour money into lightly regulated crypto markets without solid relations between exchanges and customers or defined rules.
Stablecoins, in addition, are also marketed as pegged to outside assets to do away with the volatility in other cryptos – but they might not be as stable as the name implies.
The company, asked by reporters what happened, said it would be releasing more info. But as of Tuesday evening, CNBC reported that several customers still had frozen holdings.
PYMNTS writes that stablecoin regulations have been a hot topic as of late, with Japan saying it planned to regulate them so that only licensed banks could issue stablecoins. The intent was to cut down on risk for users.
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