Class Action Lawsuit Launched Against Binance US For UST Collapse

An unprecedented class-action lawsuit numbering more than 2,000 plaintiffs has been filed against Binance.US in the aftermath of the Terra collapse, accusing the exchange of “misleading investors”.

We begin today. Partnered with one of the law firms I’m working with, Roche Freedman, our group of UST victims are bringing a class action against Binance US for tortious deceit & more.
I prefer a world where when crypto companies lie & prey on the weak, there are consequences. https://t.co/wKw0seQgEy
— FatMan (@FatManTerra) June 13, 2022

First Terra Class-Action in the US

Filed in the US District Court for the Northern District of California, the lawsuit marks the first Terra class-action in the US. Roche Freedman LLP will be championing the investors’ case in alleging that Terra’s US dollar-based UST was marketed with higher stability than claimed and promoted by misleading advertising.

Roche Freedman also alleges that Binance.US is not registered as an exchange, nor as a broker-dealer, meaning it could have been violating securities law by listing an unregistered security in UST:

If you want to resolve a dispute or request arbitration, Binance US asks you to email an address that doesn’t even exist.
This is the behemoth company equivalent of sticking your fingers in your ears and yelling “lalalala I can’t hear you!” pic.twitter.com/OHbWoJDXN7
— FatMan (@FatManTerra) June 13, 2022

Binance.US has responded to these claims in stating that “Binance.US is registered by FinCEN [US Treasury’s financial intelligence unit] and adheres to all applicable regulations. These assertions are without merit, and we will defend ourselves vigorously.” The lawsuit also names Binance’s chief executive, Brian Shroder, as a co-defendant.

Binance Challenges Money-Laundering Allegations

Only a week ago, Binance challenged allegations regarding the laundering of US$2.4 billion. According to a Reuters report, the stolen funds had been laundered through the exchange between 2017 and 2021. The report, which Binance labelled a “woefully misinformed op-ed”, followed previous investigations into unreported crypto income.