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Investors File Class Action Lawsuit Against Binance US Following LUNA-UST Fiasco

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A new class-action lawsuit filed against the US branch of the largest cryptocurrency exchange is accused of misleading investors and illegally allowing the sale of unregistered securities – LUNA and UST.

  • Filed in the Northern District of California on Monday by law firms Dontzin Nagy & Fleissig and Roche Freedman, lawsuit states that “Binance US’s business model is based on the illegal sale of unregistered securities to as many US investors as possible, as often as possible.”
  • This is because the exchange listed and began selling TerraUSD (UST) in mid-April, but the disputed stablecoin was an “unregistered security.”
  • The lawsuit also alleged that the exchange “participated in a directional promotion” of UST by giving away free tokens to increase trading volumes. “Binance US also publishes UST price action news updates and links to UST stories posted online,” the lawsuit adds.
  • This tactic has increased the number of transactions on the exchange and “thus the fees paid to her,” the lawsuit also alleges.
  • The collapse of Terra took much of the cryptocurrency space by surprise, especially given the suddenness of everything that happened. Essentially, the algorithmic stablecoin lost its peg (it was supposed to be 1:1 redeemable for USD) and users were able to profit by arbitrating with LUNA.
  • In a matter of days, both assets dropped to pennies, causing massive panic throughout the market.
  • The fallout continues to this day as the company and its founders are targeted by authorities in several countries. Some have even started proposing specific rules focused on stablecoins.
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Credit : cryptopotato.com

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