Terra’s crisis is not over yet as Binance US has been hit by a class action lawsuit.
A new class-action lawsuit has been filed against the US branch of cryptocurrency exchange Binance, accusing the company of misleading investors, illegally allowing the sale of unregistered securities. – LUNA and UST.
Dontzin Nagy & Fleissig and Roche Freedman filed a lawsuit in the Northern District of California on Monday, stating that “Binance US’s business model allows for the illegal sale of unregistered securities to as many US investors as possible.”
This is because Binance US exchange listed TerraUSD (UST) in mid-April, but the stablecoin is controversially an “unregistered security”.
The lawsuit further alleges that the exchange “participated in UST-directed promotions” by airdropping freebies to increase trading volume.
“Binance US also provides news updates on UST price movements,” the lawsuit adds.
These tactics are intended to increase the number of transactions and “thus collect more fees from investors“, the lawsuit alleges.
Terra’s collapse took the crypto space by surprise, the algorithmic stablecoin basically lost its peg, in just a few days both assets plummeted, causing mass panic across the entire market.