• A Terra LUNA holder has sued the world's largest cryptocurrency exchange Binance, claiming that federal regulations were flouted. 
  • Terra LUNA price’s collapse wiped out nearly $40 billion, and an affected investor has accused Binance of playing a role in the event. 
  • LUNA 2.0 price has recovered from its slump, posting 14.2% gains overnight. 

Jeffrey Lockhart, a Utah resident, believes Binance.us and its CEO Biran Shroder falsely advertised Terra USD (UST) as backed by fiat currency. The algorithmic stablecoin was in fact, an unregistered security, argues Lockhart. 

Binance.us hit by lawsuit in Terra LUNA price crash

The collapse of Terraform Lab's sister tokens, TerraUSD (UST) and LUNC (previously LUNA), have caused a stir in the crypto ecosystem. Over $40 billion in market value was wiped out following the crash, and the cryptocurrency exchange platforms like Binance halted trading for Terra LUNA and UST. Investors have cited this as a reason for losses suffered during the Terra LUNA collapse. 

Jeffrey Lockhart has slammed Binance.us with a lawsuit, accusing the exchange of flouting federal regulations and falsely advertising Terra USD when the stablecoin was an unregistered security. 

The exchange argues that the Financial Crimes Enforcement Network registers it as a bureau of the United States Department of the Treasury; therefore, the lawsuit is meritless. 

Binance.us profits from every trade, accused of flouting securities laws 

Lockhart wrote in the lawsuit, 

Binance U.S. profits from every trade, and therefore has a stark incentive to sell cryptoassets irrespective of their compliance with the securities laws.

The lawsuit hit Binance a week after a bipartisan group of US Senators introduced legislation to have the Commodity Futures Trading Commission (CFTC) regulate cryptocurrencies. The exchange has responded to the lawsuit, arguing that it meets the requirements and has no merit to the case. 

Lockhart's accusation reveals that Binance offered limited disclosure regarding assets traded on its exchange platform, affecting investors and LUNA, UST holders. The plaintiff is now working on registering other investors who purchased Terra LUNA on Binance as a class. 

Tibor Nagy of the law firm Dontzin Nagy & Fleissing (that represents Lockhart) argues, 

Binance and other exchanges were critical enablers of this devastating failure to comply with the securities laws. Crypto exchanges made massive profits by flouting securities laws and causing real harm to real people.

The Binance spokesperson who responded to the lawsuit issued a statement saying:

These assertions are without merit, and we will defend ourselves vigorously.

Analysts believe Terra LUNA price has 100% bullish potential

FXStreet analysts recently evaluated the Terra LUNA price chart and noted that the token has hit bottom. Analysts believe Terra LUNA has 100% bullish potential, for more information, watch this video:


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed Join Telegram

Recommended content

Recommended Content

Editors’ Picks

Shiba Inu price edges close to a 60% breakout as bears watch in disbelief

Shiba Inu price edges close to a 60% breakout as bears watch in disbelief

Shiba Inu price has managed to stay above the POC at $0.0000118, indicating support from bulls. A continuation of this momentum could trigger a 60% rally to $0.0000200. A daily candlestick close below the $0.0000106 support level will invalidate the bullish thesis for SHIB.

More Shiba Inu news

XRP price attempts a 15% rally on Ripple’s interest in buying Celsius' assets

XRP price attempts a 15% rally on Ripple’s interest in buying Celsius' assets

XRP price shows a willingness to move above a significant resistance level, which it has attempted to do so for the past three months and failed each time. While this attempt is like any other and could fail, especially if the momentum is lacking. 

More Ripple news

Avalanche price makes a turn for the better

Avalanche price makes a turn for the better

Avalanche price shows classic ramping pattern accompanied with price ascension. AVAX price has breached the oversold level on the Relative Strength Index. If the technicals are correct, a breach of the $50 barrier could happen rapidly.

More Avalanche news

Binance Coin Price Prediction: Whales take naps at the shore

Binance Coin Price Prediction: Whales take naps at the shore

Binance coin shows reasons to believe in a market bottom. Traders should keep the smart contract giant on their watchlists throughout the summer. Binance coin price is beginning to show evidence of strength.

More Bitcoin news

Bitcoin: If bulls lose control here, BTC could revisit $21,000

Bitcoin: If bulls lose control here, BTC could revisit $21,000

Bitcoin price shows an interesting setup that could reveal its next move. On closer inspection,  its technicals support a bearish outlook for the leading crypto.  

Read full analysis