OKCoin False Marketing
EKO Law has filed a complaint in San Francisco Superior Court alleging that cryptocurrency exchange OKCoin made misrepresentations regarding a cryptocurrency called TerraUSD (UST). The complaint alleges OKCoin used deceptive promotions labelling UST as a “stablecoin,” pegged in value to the U.S. dollar, and claimed it offered the same level of stability as fiat currency. It also alleges OKCoin offered promotions involving its “Earn” feature, where investors were told they could deposit UST into the equivalent of interest-bearing accounts promising high annual percentage yield rates, and withdraw those funds at any time.
UST was not backed by any hard collateral, instead relying on an algorithm to maintain a theoretical peg to the U.S. dollar. Because of UST’s theoretical peg and its lack of a hard asset backing its value, it was a highly risky asset with only a fragile thread connecting its value to the dollar. In May 2022, UST completely collapsed, losing over 90 percent of its value in a matter of days.
If you were an OKCoin customer affected by the UST collapse, or if you have information about the case, please contact us.