Cryptocurrency is often thought of as an unregulated investment instrument, not subject to the rules that regulate transactions in stocks or commodities. In reality, issuers of cryptocurrency must comply with many of the same laws as other types of investments.

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EKO represents investors who lost money when the GYEN "stablecoin" destabilized and crashed.

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The GYEN stablecoin is held out as a unique cryptocurrency, "pegged" to the Japanese yen at a rate of one-to-one. On multiple occasions since its launch, the GYEN has come untethered from the yen and fluctuated over 150% in a matter of hours. Investors lost as much as 99% of their investments when the asset returned to its pegged value.

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EKO filed a complaint in the federal court of the Northern District of California in May 2022 against GMO Trust, the company that issued GYEN. The complaint alleges GMO Trust violated various state and federal laws, including securities and consumer protection laws, by misleading investors regarding the nature of the asset.

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See the operative complaint here.

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UPDATE: GMO Trust made a motion in 2024 to dismiss the case. In February 2025, the judge presiding over the matter denied GMO Trust's motion. To see the order denying the motion, click here.