Today, a class-action lawsuit was filed against Binance.US for misleading investors and illegally selling Terra tokens. Thus, stirring up yet another controversy for the crypto exchange, Binance.US!
As per the lawsuit, it has been alleged that the crypto exchange was illegally allowing the sale of Terra’s unregistered securities – LUNA and UST. The class action suit was filed in the Northern District of California 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.”
It alleged that Binance.US illegally listed and sold the UST security in mid-april even though UST is not registered, in violation of the Securities laws.
The lawsuit also accused the exchange of participating in direct promotions of UST by airdropping free tokens to increase trading volumes. The lawsuit further added that “Binance US also writes news updates on price movements of the UST and links to stories about the UST published across the Internet.”
These strategies have pumped up the number of transactions on the exchange and consequently, ‘the fees paid to it’, claimed the lawsuit.
The controversy further prompted a response from Binance.US as it announced the ‘delisting of TerraUSD (UST)’.
Thus, Binance.US will close UST trade including ‘deposits and withdrawals’ on June 19, 2022 at 9:00 p.m. EDT. Any deposits of UST after this time would not be credited to the user’s account.
The Terra collapse sent shockwaves across the crypto circuit and its repercussions continue to this day. As a result, authorities from several countries are chasing after the company and its founders. In fact, South Korea launched an investigation to probe Terra’s collapse.
