Class-Action Lawsuit Launched Against Binance US for UST Collapse

June 15, 2022, 10:05 AM AEST - 2 weeks ago

An unprecedented class-action lawsuit numbering more than 2,000 plaintiffs has been filed against Binance.US in the aftermath of the Terra collapse, accusing the exchange of “misleading investors”.

First Terra Class-Action in the US

Filed in the US District Court for the Northern District of California, the lawsuit marks the first Terra class-action in the US. Roche Freedman LLP will be championing the investors’ case in alleging that Terra’s US dollar-based UST was marketed with higher stability than claimed and promoted by misleading advertising.

Roche Freedman also alleges that Binance.US is not registered as an exchange, nor as a broker-dealer, meaning it could have been violating securities law by listing an unregistered security in UST:

Binance.US has responded to these claims in stating that “Binance.US is registered by FinCEN [US Treasury’s financial intelligence unit] and adheres to all applicable regulations. These assertions are without merit, and we will defend ourselves vigorously.” The lawsuit also names Binance’s chief executive, Brian Shroder, as a co-defendant.

Binance Challenges Money-Laundering Allegations

Only a week ago, Binance challenged allegations regarding the laundering of US$2.4 billion. According to a Reuters report, the stolen funds had been laundered through the exchange between 2017 and 2021. The report, which Binance labelled a “woefully misinformed op-ed”, followed previous investigations into unreported crypto income.

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