- A Terra LUNA holder has sued the world's largest cryptocurrency exchange Binance, claiming that federal regulations were flouted.
- Terra LUNA price’s collapse wiped out nearly $40 billion, and an affected investor has accused Binance of playing a role in the event.
- LUNA 2.0 price has recovered from its slump, posting 14.2% gains overnight.
Jeffrey Lockhart, a Utah resident, believes Binance.us and its CEO Biran Shroder falsely advertised Terra USD (UST) as backed by fiat currency. The algorithmic stablecoin was in fact, an unregistered security, argues Lockhart.
Binance.us hit by lawsuit in Terra LUNA price crash
The collapse of Terraform Lab's sister tokens, TerraUSD (UST) and LUNC (previously LUNA), have caused a stir in the crypto ecosystem. Over $40 billion in market value was wiped out following the crash, and the cryptocurrency exchange platforms like Binance halted trading for Terra LUNA and UST. Investors have cited this as a reason for losses suffered during the Terra LUNA collapse.
Jeffrey Lockhart has slammed Binance.us with a lawsuit, accusing the exchange of flouting federal regulations and falsely advertising Terra USD when the stablecoin was an unregistered security.
The exchange argues that the Financial Crimes Enforcement Network registers it as a bureau of the United States Department of the Treasury; therefore, the lawsuit is meritless.
Binance.us profits from every trade, accused of flouting securities laws
Lockhart wrote in the 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 lawsuit hit Binance a week after a bipartisan group of US Senators introduced legislation to have the Commodity Futures Trading Commission (CFTC) regulate cryptocurrencies. The exchange has responded to the lawsuit, arguing that it meets the requirements and has no merit to the case.
Lockhart's accusation reveals that Binance offered limited disclosure regarding assets traded on its exchange platform, affecting investors and LUNA, UST holders. The plaintiff is now working on registering other investors who purchased Terra LUNA on Binance as a class.
Tibor Nagy of the law firm Dontzin Nagy & Fleissing (that represents Lockhart) argues,
Binance and other exchanges were critical enablers of this devastating failure to comply with the securities laws. Crypto exchanges made massive profits by flouting securities laws and causing real harm to real people.
The Binance spokesperson who responded to the lawsuit issued a statement saying:
These assertions are without merit, and we will defend ourselves vigorously.
Analysts believe Terra LUNA price has 100% bullish potential
FXStreet analysts recently evaluated the Terra LUNA price chart and noted that the token has hit bottom. Analysts believe Terra LUNA has 100% bullish potential, for more information, watch this video: