Binance.US has received a class-action lawsuit today. The lawsuit alleges that the cryptocurrency exchange was misleading its customers regarding the safety of the Terra blockchain. This includes its native token Luna, and the stablecoin UST. The plaintiffs also allege that Terra was in violation of federal law by selling Luna and UST, which they deem to be unregistered securities. They claim that Terra was effectively functioning as an unregistered securities exchange.
This is the first time that the court system in the U.S. is being used in an attempt to mitigate some of the damage caused by Terra’s crash. The consequence of the crash was the loss of some $40 billion in market value. The plaintiffs themselves have suffered losses due to Terra’s crash.
They claim that Binance’s misrepresentation of the risks involved in Luna and UST was, in fact, intentional. Binance’s tactic, allegedly, is to illegally and unethically sell as many unregistered securities as possible.
Last week, there was a proposition for a new Senate bill. If the bill is passed, the sale of stablecoins lacking a 100% reserve in cash, such as UST, will be prohibited. The oversight over the top 200 most valuable cryptos would be transferred from the U.S. Securities and Exchange Commission (SEC), to the government institution in charge of overseeing commodities – the Commodities Future Trading Commision (CFTC).