Coinbase to drop this Japanese yen stablecoin years after its price crash sparked investor lawsuits

Coinbase will automatically convert customers' remaining GYEN holdings into USDC next week, ahead of the stablecoin issuer's final redemption deadline.

The crypto exchange said in an Oct. 20 notice that it will disable GYEN transfers on Oct. 26 and convert outstanding balances between Oct. 26 and Oct. 30 at prevailing market rates without transaction fees.

The decision comes as GMO-Z.com Trust Company winds down the Japanese yen-backed stablecoin, which has a market capitalization of approximately $13 million. Customers seeking to avoid Coinbase's conversion must withdraw their tokens before Oct. 26.

The shutdown marks the final chapter for a stablecoin whose troubled trading history triggered investor lawsuits and eventually resulted in a $6.75 million settlement earlier this year.

GMO Trust prepares final redemptions before November deadline

GMO Trust began winding down GYEN and its dollar-backed ZUSD stablecoin in May, suspending new issuance and initiating the voluntary dissolution of its New York-chartered trust company.

In an Oct. 20 statement, the issuer reminded holders that its 180-day redemption period closes on Nov. 11, giving them three weeks to exchange their tokens directly for the currencies backing them.

Under the arrangement, eligible customers can redeem each GYEN for one Japanese yen and each ZUSD for one US dollar without fees charged by GMO Trust.

However, the process requires an approved account, identity verification, and an eligible linked bank account. Customers must also meet minimum redemption thresholds of 100 GYEN or one ZUSD, while banks may impose additional transfer or foreign-exchange charges.

These requirements create different financial outcomes for holders using Coinbase and those redeeming directly with the issuer.

Coinbase will use the prevailing market price when converting GYEN to USDC, while GMO Trust guarantees the token's stated yen value through its direct redemption process. Customers could therefore receive different amounts depending on the prevailing trading price and exchange rate.

GMO Trust has warned that secondary-market prices may deviate from their intended pegs as circulating supply declines during the shutdown.

The issuer has also established a mandatory redemption process for eligible tokens remaining after Nov. 11.

Those holdings will be converted into USDC based on their stated redemption values, with GYEN's dollar equivalent determined using an exchange rate fixed on Nov. 12. GMO Trust expects distributions to be completed by the end of 2026.

The process is subject to supported blockchain networks, compliance screening and wallet compatibility. Holders whose wallets don't meet those requirements may not receive automatic distributions.

Coinbase customers will miss that later conversion process unless they withdraw their GYEN before the exchange's cutoff. The platform has also warned that deposits made after the conversion may be unrecoverable.

GYEN's troubled trading history

GYEN's shutdown follows years of controversy over the stablecoin's price stability and its handling by Coinbase.

The token faced major problems shortly after Coinbase began supporting it in November 2021, when its trading price surged far above the Japanese yen before collapsing.

As CryptoSlate reported in May 2022, investors sued Coinbase and GMO Trust, alleging that both companies misled customers about the stability of a token marketed as maintaining a one-to-one peg with the yen.

The complaint alleged that some investors bought GYEN at prices up to seven times its intended value before the token plunged about 80% in a single day.

Coinbase subsequently restricted trading, a decision plaintiffs argued prevented customers from selling their holdings and compounded their losses.

The dispute eventually moved into separate legal proceedings after a federal judge ordered arbitration of the claims against Coinbase in January 2023. The case against GMO Trust continued in federal court, where investors pursued claims under New York and California consumer protection laws.

In May 2026, a federal judge approved a $6.75 million settlement for eligible investors who lost money after buying GYEN while it traded away from its intended yen value.

The settlement resolved the litigation against GMO Trust without a finding of wrongdoing. The company had disputed the allegations, and the agreement did not resolve the separate claims against Coinbase.