- Binance is facing a new lawsuit over an alleged misrepresentation of the stablecoin TerraUSD, Bloomberg reports.
- The investor, Jeffrey Lockhart, claims Binance failed to clarify that TerraUSD was a security.
- Binance says the lawsuit is baseless and that the exchange abides by the necessary regulations.
Binance is facing a new lawsuit over alleged misrepresentations of the stablecoin TerraUSD, Bloomberg first reported.
An investor, Jeffrey Lockhart, filed the suit on Monday in San Francisco against BAM Trading Services Inc., which conducts business as Binance.US. The suit claims that Binance didn't accurately disclose information pertaining to TerraUSD as a security. TerraUSD isn't registered with the SEC or any state regulators, Lockhart's suit says.
Binance told Bloomberg that the lawsuit is baseless, with a representative for the company arguing that it's listed with "FinCEN and adheres to all applicable regulations." The news follows a report last week that the SEC was investigating Binance over the marketing of TerraUSD prior to its collapse.
The latest turbulence for Binance comes as bitcoin, the largest cryptocurrency by market capitalization, fell Monday amid a broader market sell-off that saw the market fall below a $1 trillion market capitalization. Investors are fleeing cryptocurrencies after the Consumer Price Index report Friday showed inflation increasing by 8.6% in May, the fastest pace in 41 years.
Lockhart's suit seeks undisclosed damages as well as a request that Binance de-list TerraUSD.
TerraUSD lost its fiat currency peg in May that extended to its sister token Luna. TerraUSD's collapse led to the companysplitting its blockchain into two new parts that would issue new native tokens. Stablecoins are often attractive to cryptocurrency investors to gain exposure while limiting volatility that's become notorious throughout crypto markets.