A class action complaint has been filed against the United States branch of the global exchange Binance, Binance U.S., and as a result, the company is coming under further scrutiny. The complaint alleges that the exchange was complicit in deceiving investors about LUNA by playing a role in the scheme. Over two thousand individuals who have invested their life savings have said that fraudulent marketing was the key factor that led to their financial ruin.
In a class-action case that was filed on Monday in North California, Binance U.S. has been accused of deceiving investors over the Terra blockchain ecosystem.
The lawsuit was the first time that LUNA, Terra, and the whole Do Kwon ecosystem had any kind of legal representation in a court in the United States. When LUNA reached zero, it wiped away almost $40 billion worth of investments held by people who watched the currency collapse.
The decline in Terra’s price has been detrimental to retail and small investors such as Hashed and Paradigm. A significant number of individuals took their own deaths as a result of the devastating collapse of Terra since they had lost all of their money and possessions. In the action that was brought by the legal firm Roche Freedman, it is alleged that Binance misrepresented the stability of UST in its marketing.
When UST and its sibling token LUNA plummeted to zero in May, thousands of naive retail investors were taken aback by the suddenness of the event. The lawsuit asserts that the damages were caused by deceptive advertising on the defendant’s part.
Additionally, the complaint asserts that Binance U.S. is not registered with the appropriate authorities to do business either as an exchange or a broker. According to the allegations made in the case, this is a violation of the law governing securities. The complaint represents a new development in the Terra case, in which the listed exchange, rather than the corporation that was responsible for launching the currency, is being sued.
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