Disgruntled investors in California have filed a class-action lawsuit against Binance.US for listing TerraUSD and LUNA without disclosing UST as a security.

While its global counterpart, Binance, faces legal headwinds as the SEC investigates its 2017 initial coin offering, Binance.US, and its CEO Brian Shroder has landed in hot water with American investors, who filed a class-action lawsuit in the Northern District of California.

Plaintiff Jeffrey Lockhart from Utah alleges on behalf of all parties suing Binance.US that the company misinformed investors, telling them that staking UST for substantial returns was safe and that Terra was backed by dollar reserves, in advertisements that were later retracted in an apparent admission of UST’s status as a stablecoin without fiat reserves.

Plaintiffs also allege that the crypto entity did not disclose to the Securities and Exchange Commission that UST was a security, nor did it register with the agency either as a securities exchange or as a broker-dealer.

While many crypto exchanges promote digital assets as safe for everyday investors, that narrative is negated by “harsh, unconscionable terms,” including limited liability, “class-action waivers,” and onerous dispute resolution schemes, according to the filing. Informal customer disputes at Binance.US involve opening a ticket with Customer Service and working “with Customer Service to resolve [the] issue,” failing which the customer must send an email with sufficient details for Binance.US to review, without an upper limit on the review period. The next step, the filing claims, is that the customer must provide the company with a hardcopy notice “describing the nature and basis of the claim or dispute” and “setting forth the specific relief sought.”

Represented by law firms Roche Freedman LLP and Dontzin Nagy & Fleissig LLP, plaintiffs seek an injunction compelling Binance.US to delist UST should the company remain an unregistered securities provider and award damages enumerated at a trial by jury. Since Binance.US benefitted from transaction fees, the plaintiffs also seek reimbursement.

The founder of Roche Freedman LLP encouraged LUNA investors to approach his law firm if they bought LUNA or UST from Coinbase, Kraken, or Gemini. So more lawsuits could be on the way. South Korean investors have already filed a lawsuit against the founders of the Terra/Luna project.

The SEC announced in February a probe into Binance.US trading partners Sigma Chain AG and Merit Peak Ltd and is already investigating Binance, the global entity, for offering Binance Coin (BNB) during an initial coin offering in 2017.

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The post Class-Action Lawsuit Filed Against Binance US in Northern California for UST Sales appeared first on BeInCrypto.

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