The law firm Roche Freedman LLP, on behalf of investors in LUNA and TerraUSD (UST)filed a class-action lawsuit against Binance’s US subsidiary and the company’s CEO Brian Shroder.
According to the 72-page complaint, Binance.US offered unregistered securities to U.S. residents, misleading them. The lawyers noted that the unit was not registered as a broker-dealer, in violation of local law.
The investors contend that the exchange’s subsidiary facilitated the sale of UST and participated in an airdrop of tokens ‘intended to increase trading volume’.
In May, Roche Freedman LLP partner Kyle Roche contacted LUNA and UST investors who bought assets on Coinbase, Gemini and Binance, asking them to reach out to the firm for ‘assistance’.
If you purchased $LUNA or $UST on either @coinbase @krakenfx @binance or @Gemini, please reach out to TerraRecovery@rochefreedman.com . My firm is coordinating an effort to help those who lost funds from the recent collapse of #terra and #luna.
— Kyle Roche (@KyleWRoche) May 13, 2022
Prices of UST and LUNA began to fall on May 10. This occurred amid outflows from the Anchor protocol as the yield on deposits fell to 17.87%. As a result, on May 8, the ‘stablecoin’ briefly lost its peg to the dollar.
The decline continued on May 11, followed by the LUNA used to mint the algorithmic stablecoin plunging to $0.3.
On May 28, Do Kwon announced the launch of the Terra 2.0 mainnet. The listing of new LUNA tokens was supported by many centralized exchanges, including Binance, Huobi and Kraken.
Earlier, Binance CEO Changpeng Zhao revealed the company’s losses from its Terra investments. He also stated that the exchange did not profit from this and has always prioritised user protection.
After the collapse, South Korea’s financial regulators held an emergency meeting to assess the incident’s fallout. According to local media, authorities began an investigation into Terraform Labs employees as part of the inquiry.
In May, one of South Korea’s leading law firms, LKB & Partners, announced plans to sue Kwon.
Recall, in June Bloomberg sources reported that the U.S. Securities and Exchange Commission had opened an investigation into UST.
Subscribe to ForkLog’s channel on YouTube!