Why Did These LUNA Investors Sue Binance.US?
Binance.US users demand recompense for their LUNA-UST investments, according to a document filed with the United States District Court for the Northern District of California. Binance.US and its CEO Brian Shroder are the targets of a class action lawsuit filed in the United States.
They claims that Binance.US has failed to “abide by U.S. federal” and securities regulations. They claimed that the exchange platform offered UST, Terra Classic algorithmic stablecoin, and LUNA now dubbed LUNC as a “safe investment”.
In this regard, they say that cryptocurrencies and digital assets are unregistered securities with the Securities and Exchange Commission. They made their case by claiming that LUNA’s success or failure was determined by a centralized third party, Terraform Labs, and its co-founder and CEO Do Kwon.
“UST was advertised and sold to investors as a “safe” asset that could be used to earn substantial returns, including in the form of interest. The respective prices of UST and LUNA both depended upon, and continue to depend upon, the efforts and success (or failure) of TFL,” they stated.
The plaintiffs cited a recent Binance.US advertising as proof, as shown below. The exchange advertises their UST staking product with a 19.63% annual percentage rate (APR) and a “High Yield, Safe, and Happy Earn”.
However, the advertisement appears to be from Binance, the parent business of Binance.US. The platform, which is located in the United States, has attempted to set itself apart from the worldwide exchange. As can be seen below, their efforts have transferred into their brand and marketing initiatives.
Despite this, the plaintiffs claimed that Binance US neglected to promote its goods to its users: “Despite enjoying those fantastic profits, Binance U.S. plainly failed to comply with federal and state securities laws. Binance U.S. failed to disclose that UST is in fact a security, and that it is selling these securities, even though (i) there is no registration statement in effect for them (…).”
The Securities and Exchange Commission of the United States has been evasive about its stance on cryptocurrencies. According to several sector players, the Commission failed to give legal and regulatory clarification.
As a result, it has fought legal fights with some of the crypto industry’s biggest names, including Binance.US and LUNA’s Do Kwon. The following are the allegations made in the class action:
“Binance U.S.’s failure to comply with the securities laws, and its false advertisements of UST, have led to disastrous consequences for Binance U.S.’s customers: in May 2022, in the span of just a few days, UST lost essentially all its value—a loss of approximately $18 billion. Investors who purchased UST on Binance U.S. were wiped out, learning quickly that, contrary to Binance U.S.’s advertisements, UST was not “safe,” “stable,” or “fiat-backed.”
“Binance.US is registered by FinCEN and adheres to all applicable regulations. These assertions are without merit and we will defend ourselves vigorously,” Binance.US spokesman stated.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Why Did These LUNA Investors Sue Binance.US?
Why Did These LUNA Investors Sue Binance.US?
Binance.US users demand recompense for their LUNA-UST investments, according to a document filed with the United States District Court for the Northern District of California. Binance.US and its CEO Brian Shroder are the targets of a class action lawsuit filed in the United States.
They claims that Binance.US has failed to “abide by U.S. federal” and securities regulations. They claimed that the exchange platform offered UST, Terra Classic algorithmic stablecoin, and LUNA now dubbed LUNC as a “safe investment”.
In this regard, they say that cryptocurrencies and digital assets are unregistered securities with the Securities and Exchange Commission. They made their case by claiming that LUNA’s success or failure was determined by a centralized third party, Terraform Labs, and its co-founder and CEO Do Kwon.
“UST was advertised and sold to investors as a “safe” asset that could be used to earn substantial returns, including in the form of interest. The respective prices of UST and LUNA both depended upon, and continue to depend upon, the efforts and success (or failure) of TFL,” they stated.
The plaintiffs cited a recent Binance.US advertising as proof, as shown below. The exchange advertises their UST staking product with a 19.63% annual percentage rate (APR) and a “High Yield, Safe, and Happy Earn”.
However, the advertisement appears to be from Binance, the parent business of Binance.US. The platform, which is located in the United States, has attempted to set itself apart from the worldwide exchange. As can be seen below, their efforts have transferred into their brand and marketing initiatives.
Despite this, the plaintiffs claimed that Binance US neglected to promote its goods to its users: “Despite enjoying those fantastic profits, Binance U.S. plainly failed to comply with federal and state securities laws. Binance U.S. failed to disclose that UST is in fact a security, and that it is selling these securities, even though (i) there is no registration statement in effect for them (…).”
The Securities and Exchange Commission of the United States has been evasive about its stance on cryptocurrencies. According to several sector players, the Commission failed to give legal and regulatory clarification.
As a result, it has fought legal fights with some of the crypto industry’s biggest names, including Binance.US and LUNA’s Do Kwon. The following are the allegations made in the class action:
“Binance U.S.’s failure to comply with the securities laws, and its false advertisements of UST, have led to disastrous consequences for Binance U.S.’s customers: in May 2022, in the span of just a few days, UST lost essentially all its value—a loss of approximately $18 billion. Investors who purchased UST on Binance U.S. were wiped out, learning quickly that, contrary to Binance U.S.’s advertisements, UST was not “safe,” “stable,” or “fiat-backed.”
“Binance.US is registered by FinCEN and adheres to all applicable regulations. These assertions are without merit and we will defend ourselves vigorously,” Binance.US spokesman stated.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
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