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CRYPTO NEWS DESK — 2022-06-13

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

Terra's meltdown continues to cause suffering for some as Binance US has been served with a class-action lawsuit.

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

A new class-action lawsuit filed against the US branch of the largest cryptocurrency exchange alleges the company 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, the lawsuit reads that 'Binance US's business model is premised on illegally enabling the sale of unregistered securities to as many US investors as possible, as often as possible.' This is because the exchange listed and started selling TerraUSD (UST) in the middle of April, but the controversial stablecoin was an 'unregistered security.' The lawsuit further alleged the exchange that it 'participated in direction promotions' of UST by airdropping free tokens to increase trading volumes. 'Binance US also writes news updates on price movements of the UST and links to stories about the UST published across the Internet,' adds the suit. These tactics have managed to increase the number of transactions on the exchange and 'thus the fees paid to it,' the lawsuit also alleged. The Terra collapse caught most of the cryptocurrency space by surprise, especially given the suddenness of everything that transpired. Essentially, the algorithmic stablecoin lost its peg (supposed to be redeemable 1:1 with the USD), and users were able to profit by arbitraging it against LUNA. In a matter of days, both assets plummeted to pennies, causing mass panic across the entire market. The aftermath continues to this day as authorities from several countries are going after the company and its founders. Some even began proposing specific regulations focused on stablecoins.

— Jordan Lyanchev of CryptoPotato - Crypto Blog

Keywords: AA News, Crypto News, Social, Binance, Terra (LUNA), United States


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