Binance.US the United States arm of the Binance cryptocurrency exchange has been dragged to court in a class-action lawsuit by a group of investors who claimed the trading platform facilitated the trading of LUNA and UST tokens which are unregistered securities in the US.
The lawsuit was filed today in the Northern District of California, noting that the securities sale was an attempt by the exchange to mislead its customers.
The lawsuit also claimed that the business model of Binance.US is “premised on illegally enabling the sale of unregistered securities to as many US investors as possible, as often as possible.”
The lawsuit is one of the many prospective aftermaths of the collapse of the old Terra-linked tokens including the algorithmic stablecoin, UST, and what is now known as Luna Classic (LUNC). Both tokens contributed to erasing billions of dollars from investors, many of which have no plan B to recover their lost funds.
The Binance.US lawsuit is one step toward finding solace for these investors who are being represented by law firms Roche Freedman and Dontzin Nagy & Fleissig. The lawsuit is demanding a trial by jury on all offenses triable. This entire class action lawsuit was pre-determined as Kyle Roche, a partner at Roche Freedman shared a public message via Twitter last month calling those who have suffered loss through the Terra protocol collapse.
“If you purchased $LUNA or $UST on either @coinbase @krakenfx @binance or @Gemini, please reach out to TerraRecovery@rochefreedman.com . My firm is coordinating an effort to help those who lost funds from the recent collapse of #terra and #luna,” Roche said at the time.
Binance.US Lawsuit: a Major Precedence
The lawsuit filed against Binance.US will constitute a major precedent that the company will do all it can to come against. Should the firm be found guilty in any way, it can open the floodgates for other crypto exchanges to face a similar legal dilemma.
A Binance.US spokesperson has maintained the stand that it is compliant to all of the extant security laws, and is ready to defend itself in the courts come what may.
“Binance.US is registered by FinCEN and adheres to all applicable regulations. These assertions are without merit and we will defend ourselves vigorously,” the Binance spokesperson said.
Dragging a crypto exchange to court is not new in the space. TheCoinRise reported earlier this month that the Commodity Futures Trading Commission (CFTC) has filed a suit against Gemini exchange for a 2017 Bitcoin Futures inquiry fraud.
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