June 7, 2023

Investors sued Binance.US for trading UST and LUNA

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2 minutes.

Investors sued Binance.US for trading UST and LUNA

The U.S. District Court for the Northern District of California has filed a class action lawsuit against the U.S. arm of the Binance cryptocurrency exchange.

The lawsuit was filed on June 13 by investor JeffreyLockhart v. BAM Trading Services Inc. (Binance.US) and its CEO Brian Shroder. The plaintiffs allege that UST and LUNA were listed on the Binance exchange as unregistered securities, therefore trading in these crypto assets violates US federal laws.

According to investors who supported the lawsuit, the platformadvertised UST as a "secure and fiat-backed" crypto asset. Advertising of the Terra ecosystem by the Binance exchange misled investors, which led to the loss of money as a result of the collapse of the project, the lawsuit states. The petitioners are seeking damages from the exchange for damages related to UST, including payment of trading fees and interest, as well as reimbursement of legal fees and attorneys' fees.

Investors outraged that Binance re-listedfor trading new LUNA tokens, when the founder of the Terra project, Do Kwon, developed a “plan for the revival of Terra 2.0”. On May 31, the rate of these tokens fell by 67% within a few hours after the start of trading on the leading cryptocurrency exchanges.

In early June, Binance CEO ChangpengZhao commissioned the exchange's investigation team to investigate Do Kwon's actions regarding fraud, insider trading and tax evasion. Meanwhile, the activity of the exchange itself was also investigated. According to Reuters, at least $2.35 billion was laundered through Binance between 2017 and 2021.