A Utah resident has filed a lawsuit against the CEO and the company for misrepresenting TerraUSD as a safe asset. According to the lawsuit, because the exchange isn't registered with the US government, it doesn't have to reveal information about assets traded on its platform. "Crypto exchanges made massive profits by skirting securities laws and causing real harm to real people," according to the law firm.
The exchange is registered with the US Treasury Department's Financial Crimes Enforcement Network and complies with all applicable regulations according to a spokesman for the exchange. They said they would defend themselves vigorously.
TerraUSD's value collapsed in May, causing huge losses for investors who trusted it to maintain its value of $1 per coin. TerraUSD is a stable coin that is not backed by currency. It has a mechanism in place to restore its value to $1 if it ever goes down. The opportunity to make money with the Anchor lending program, which promised an annual yield of 20 percent for deposits of the coin, made investors invest their money into TerraUSD. Terra's mechanism is currently being traded at less than one cent.
He wants the lawsuit to be registered as a class action on behalf of everyone who bought Terra. There was a "stuck on-chain transaction" that caused the world's largestcryptocurrencies exchange to pause withdrawals for a few hours yesterday. Reports emerged a few days ago that claimed that Binance had become a hub for fraud and drug traffickers.
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