Binance US has been slapped with a lawsuit that alleges the cryptocurrency exchange misled investors about Terraform Labs’ tokens, CoinDesk reported.
The prices of Luna and UST – the native token and stablecoin of Terraform Labs – crashed in May, eroding nearly US$40 billion of investor wealth.
The lawsuit was reportedly filed by a member of the Terra Research Forum. It claims that the US-based partner of cryptocurrency exchange Binance falsely marketed UST as being more stable than it was in reality.
The lawsuit further claims that Binance US has breached local securities law as it was not registered as an exchange or a broker-dealer platform.
Last month, South Korea’s National Tax Service fined Terraform Labs nearly US$78.6 million for tax evasion. The penalty came after an investigation into the company’s evasion of corporate and income tax through setting up shop in Singapore and the Virgin Islands.
Editing by Samreen Ahmad and Arpit Nayak
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