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Monday, March 27, 2023

Lawsuit Accuses Binance US of Selling Unregistered Securities

Lawsuit Accuses Binance US of Selling Unregistered Securities – On Monday, a lawsuit was filed against the Binance trading platform in the United States, accusing the business of selling unregistered securities and misleading investors. The claims come from last month’s Terra UST de-pegging incident, which resulted in the obliteration of the whole Terra Classic blockchain ecosystem.

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The class-action lawsuit was filed in California by Roche Freedman LLP, the same law firm that was engaged in the Kleiman vs. Wright case and other well-known cryptocurrency lawsuits.

Binance US is accused of not being committed to its clients by failing to comply with federal and state securities laws when it listed terrausd, according to the lawsuit. According to the lawsuit, UST was promoted as a “safe” asset, and Binance US is “intimately familiar with UST and LUNA” as “an early supporter of Terraform Labs.”

Also Read: Human Rights Advocates Insist Bitcoin Provides Financial Inclusion

According to the lawsuit, Binance advertises locked staking on UST with the slogan “high yield, safe & happy earn.” Another ad in the case refers to UST as “fiat-backed.” According to the class action, Binance US failed to disclose that UST is in reality a security, and Binance refused to register as a securities exchange or as a broker-dealer with the Securities and Exchange Commission (SEC).

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“Binance US’s inability to comply with the securities laws, as well as its misleading advertising of UST, resulted in terrible results for Binance US’s clients in May 2022, when UST lost practically all of its value – a loss of approximately $18 billion,” according to the lawsuit. According to the lawsuit, Binance removed the fraudulent advertisements after the UST crash, but the company continues to sell Terra-based assets.

According to the lawsuit:

“On May 31, 2022, Binance US’s parent firm added insult to injury when it began selling Luna 2.0, a new token that, like LUNA, is controlled centrally by Terraform Labs.”

Fatman, a well-known whistleblower, assisted the lawsuit by gathering 2,000 Terra investors. Following the complaint filed by Roche Freedman on Monday, Fatman has revealed that another class-action suit targeted at assisting grieving Terra investors will be filed. On Monday, Fatman also tweeted about the ongoing class action against Binance US.

Also Read: Kenyan and Nigerian Central Bankers Attack Cryptocurrencies but Endorse CBDCs

Lawsuit Accuses Binance US of Selling Unregistered Securities – Fatman tweeted, “We begin today.” “Our group of UST victims is bringing a class action against Binance US for tortious deceit and more, in partnership with one of the law companies I’m dealing with.” “When crypto companies lie and prey on the weak, I prefer a world where there are consequences.”

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