An Investor in the United States has dragged the CEO of Binance Chen Zhao and Binance U.S to court. The investor alleged that Binance U.S promoted UST as a safe form of investment only to see it lose its peg last Month. The investor, Jeffrey Lockhart accused the trading platform of insisting that investment in UST is safe due to its strong reserve of fiats.
Upon the collapse, the investor discovered that the claims about the token were not true. During personal research, Lockhart also realized that the token lacks due registration. Such Important information could have stopped Jeffrey Lockhart from investing in the token. Thus, prompting him to file a lawsuit against Chen Zhao, Binance U.S, and the Chief Executive of Binance U.S, Brian Shroder.
Furthermore, The investor accused Binance U.S of not gaining a due operational license from United States of America authorities. According to Lockhart, the lack of registration is harmful to traders and the collapse of UST belongs to that category. He argued that proper registration would have compelled Binance U.S to give accurate information about tokens on its platform.
Also, the legal representative of Lockhart regarded Binance U.S as an accomplice to the collapse of the UST. The Representative, Tibor Nagy narrated how crypto exchanges dodge regulations to improve their profit crest and greedily harm investors. He emphasized that the collaboration of exchange platforms and regulators is in the best interest of investors.
In response, A representative of Binance reveals that the organization is duly known by the Financial Crimes Enforcement Network. In addition, The representative argued that Binance operates in accordance with the stipulations of regulators across the globe.
Binance U.S and registration troubles
With the lawsuit, Lockhart aims to be regarded alongside other holders of UST on Binance U.S as a special class. Meanwhile, the recent filing against Binance U.S sums up the legal troubles Binance had encountered lately. At a time, Investors filed a case against the firm for failing to register duly. According to the lawsuit, they pointed accusing fingers at Binance for not registering appropriately.
However, a sitting federal judge in Manhattan dislodged the claims that the case is irregular on the premises of equity. The judge stressed that the investors didn’t prompt the appropriate bodies on time about the irregularities. Due to that, the investors are currently appealing the case hoping to get a ruling in their favor.