- A class action lawsuit has been filed against Binance.US.
- The lawsuit is for misleading investors over Terra.
- The fall of Terra wiped $40 billion in investor funds.
Binance.US is under scrutiny as a class-action lawsuit has been filed against the US branch of the global exchange. The lawsuit claims that the exchange played its part in misleading the investors about LUNA. Over 2,000 investors who lost their life savings claim that false marketing is the primary reason for losing funds.
Binance.US has been indicted for misleading investors over the Terra blockchain ecosystem in a class action complaint filed on Monday in North California.
The suit held witness to the first US court filing associated with LUNA, Terra, and the entire Do Kwon ecosystem. LUNA wiped out over $40 billion in funds of investors who witnessed the coin falling to zero.
Terra’s fall has been hurtful to small and retail investors like Hashed and Paradigm. Terra’s fall also witnessed a lot of people taking their lives as they lost their life savings in the catastrophic fall. The lawsuit filed by Roche Freedman law firm states that Binance marketed UST as more stable than it was.
Thousands of naïve retail investors were caught off guard when UST and its sister token Luna classic (LUNC) collapsed to zero in May. The suit claims that misleading advertising is to blame for the losses.
Additionally, the lawsuit is also alleging that Binance.US is not registered as an exchange or a broker. According to the lawsuit, this holds a charge for violating securities law. The lawsuit is a different turn in Terra’s case, where the listed exchange is charged instead of the organization that launched the coin.