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Lawsuit Accuses Binance US of Falsely Advetising Terra UST as Safe and Selling Unregistered Securities

Roche Freedman LLP is a company that is known for its high-profile crypto lawsuits during the past years. The company has recently filed a class-action lawsuit against the leading cryptocurrency exchange, Binance US, in California. The lawsuit alleges the crypto exchange of misleading investors and selling unregistered securities to around 2,000 plaintiffs. 

On Monday, the US-based Binance trading platform Binance US was served with a lawsuit. The lawsuit has been initiated following the de-pegging incident of Terra UST and the obliteration of the entire Terra Classic blockchain ecosystem. 

Roche Freedman LLP is popular in the crypto industry as a law firm that files high-profile crypto lawsuits. It is the same company that was also involved in the Kleiman vs. Wright case, and numerous other well-known crypto cases.

The lawsuit accuses Binance of not being fully committed to its users. The reason for that is that Binance US was allegedly not committed to its customers as the crypto exchange did not comply with the state securities and US federal laws at the time it listed terrausd (UST). The lawsuit has claimed that terrausd was sold as a safe asset. Moreover, it seemed that Binance US was huge early support for terrausd, as Binance US was intimately familiar with LUNA and UST. 

Shared above is the screenshot of the lawsuit. As evident through the screenshot, the alleged accusations of the lawsuit are supported by the false advertisement of Binance. Binance offered locked staking on terrausd and classified it as a safe asset stating “high yield, safe and Happy Earn.”

Moreover, the lawsuit also shows another advertisement whereby Binance US states UST as “fiat-backed.” The lawsuit states that Binance US failed to disclose that UST is in fact a security. Furthermore, according to the lawsuit, Binance refused to register as a broker-dealer or securities exchange with the United States Securities and Exchange Commission (SEC). 

The lawsuit states that the failure of Binance US to comply with the laws and false advertisements of terrausd had disastrous consequences for the customers of Binance. In May, when the stablecoin plunged and lost all its value, i.e, a loss of $18 billion, the customers of Binance US who got appealed through the false advertisement lost lots of money. 

In this case, the whistleblower Fatman has helped Roche Freedman LLP by gathering 2,000 investors. Fatman Tweeted, “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 [and] more. I prefer a world where when crypto companies lie [and] prey on the weak, there are consequences.