The fall of Terra, which went from being the world’s third largest stablecoin to being valued at less than a $1, has been the most talked-about topic.
Since hitting an all-time high in November, the value of Bitcoin has plummeted, as has the value of other digital assets such as altcoins and stablecoins, resulting in the loss of millions of dollars in investor assets.
According to recent media sources, Binance.US is facing a lawsuit for its role in the unexpected crash of the stablecoin Terra UST, which resulted in the loss of billions of dollars by a huge number of investors around the world.
Did Binance Mislead The Investors?
Binance US and its CEO were slapped with a class action lawsuit on Monday in the Northern District of California. The lawsuit claims that Binance.US misled the plaintiffs by selling them unregistered securities.
Utah resident Jeffrey Lockhart filed a complaint against Binance and Chief Executive Brian Shroder, alleging that Binance misrepresented Terra USD as “secure” and backed by fiat currency when it was actually an unregistered security.
Binance’s failure to register as a securities exchange with the US authorities, according to Lockhart, limits disclosure regarding assets traded on the platform, affecting investors.
Lockhart wrote in his lawsuit, “Binance U.S. profits from every trade, and therefore has a stark incentive to sell cryptoassets irrespective of their compliance with the securities laws.”
The plaintiff is attempting to register himself and other investors who purchased Terra on Binance as a class.
The complaint comes after a bipartisan group of US Senators introduced legislation last week to have the Commodity Futures Trading Commission (CFTC) regulate cryptocurrency rather than the Securities and Exchange Commission (SEC).
Furthermore, a Binance spokesman stated that the exchange is registered with FinCEN, a division of the US Treasury Department, and that it conforms with all applicable requirements.