BinanceUS Gets Sued Over Selling LUNA and UST
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Class Action Filed Against BinanceUS
In a class-action lawsuit filed on Monday in North California, BinanceUS has been accused of misleading investors by selling unregistered securities. The 72-page lawsuit accuses the cryptocurrency exchange of selling Terra's UST stablecoin despite the fact it is not registered as a broker-dealer, which, it says, is a violation of US securities laws.
The lawsuit also alleges that the business model of BinanceUS is "premised on illegally enabling the sale of unregistered securities to as many US investors as possible, as often as possible."
The suit marks the first major US-based court case, which was filed by American law firm Roche Freedman LLP. Kyle Roche, a named partner at the law firm later tweeted:
"If you purchased $LUNA or $UST on either @coinbase @krakenfx @binance or @Gemini, please reach out to TerraRecovery@rochefreedman.com. My firm is coordinating an effort to help those who lost funds from the recent collapse of terra and luna."
Death Spiral of Terra Ecosystem
The move comes following the death spiral of UST, Terra's algorithmic stablecoin, which erased more than $40 billion in value from the market almost overnight.
Since then, Terraform Labs CEO Do Kwon tried to make amends for lost funds, by airdropping Luna 2.0 to holders.