A class action lawsuit against Binance US has been filed in California, alleging that the exchange misled investors and sold unregistered securities to nearly 2000 plaintiffs. The lawsuit was filed by law firm Roche Freedman LLP, a firm known for high-profile crypto lawsuits over the past several years. The lawsuit accuses Binance US of selling terrausd (UST) as a firmly anchored stablecoin tied to the value of the US dollar.
Class Action Lawsuit Against Binance US for Terra UST Plunge – 2,000 plaintiffs claim they were misled by the exchange
On Monday, Binance US, the U.S.-based trading platform of Binance, was hit with a lawsuit alleging that the company sold unregistered securities and misled investors. The accusations stem from last month’s Terra UST de-pegging incident and the erasure of the entire Terra Classic blockchain ecosystem.
The class action lawsuit was filed in California, and the law firm behind the suit is Roche Freedman LLP, the firm involved in the Kleiman vs. Wright case and other high-profile crypto litigation.
The lawsuit accuses Binance US of failing to commit to its customers by failing to comply with U.S. federal and state securities laws when it listed Terrausd (UST). The lawsuit claims that USTs were marketed as “safe” assets and that “as an early backer (of Terraform Labs), Binance US is familiar with USTs and LUNA.”
The lawsuit shows an ad showing that Binance offers UST-locked staking and says “high yield, safe&happy earning.” Another ad shown in the lawsuit calls the UST “fiat-backed.” The class action states that Binance US failed to disclose that “USTs are in fact securities” and that Binance “refused to register” with the U.S. Securities and Exchange Commission (SEC) “as a securities exchange or broker-dealer.”
“Binance US’s failure to comply with securities laws and its false advertising of USTs had disastrous consequences for Binance US customers in May 2022, with USTs losing virtually all of their value in just a few days, amounting to approximately $18 billion,” the suit claims. The lawsuit notes that after the UST collapse, Binance removed the false advertisements, but Binance has not stopped selling terabased securities.
The lawsuit states.
Binance US’s parent company unscrupulously added insult to injury when, on May 31, 2022, it began selling a new token that, like Luna 2.0-LUNA, was centrally controlled by [Terraform Labs].
Whistleblower Fatman says Binance lawsuit is just the beginning and another class action lawsuit is on the way to help Terra investors
Fatman, a known whistleblowerwho helped move the lawsuit forward by rallying 2,000 Terra investorsFatman said another class action lawsuit aimed at helping grieving Terra investors was filed by Roche Freedman on Monday The case follows on the heels of a current class action lawsuit against Binance US, which Fatman also tweeted about on Monday.
“We start today,” Fatman tweeted.” In partnership with Roche Freedman, one of the law firms I work for, our group of UST victims are filing a class action lawsuit (and more) against Binance US for illegal fraud. I prefer a world where when crypto companies lie [and] prey on the weak, there are consequences.”
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