A U.S. investor, Jeffrey Lockhart sued Binance U.S. and its CEO on Monday, alleging that the cryptocurrency exchange deceptively advertised Terra USD as a secure asset before the so-called stablecoin’s value collapsed last month
Stablecoins are digital tokens pegged to the value of traditional assets, such as the U.S. dollar.
But Terra USD’s value plunged last month, breaking its 1:1 dollar peg and contributing to a tumble in other crypto-assets like Bitcoin.
Utah resident Jeffrey Lockhart is seeking to have himself and other investors who bought Terra on Binance registered as a class.
Binance U.S.’s failure to register as a securities exchange limits disclosure about assets traded on the platform, harming investors, lawsuit claims.
Binance spokesperson said the exchange is registered with the Financial Crimes Enforcement Network (FinCEN) and complies with all applicable regulations.
The company will delist Terra USD, a decision made before the lawsuit was filed, and will defend itself “vigorously”.
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