Top U.S. Crypto Exchanges To Face Lawsuit Over Terra Crash, Says Insider
A Terra insider calling themselves “FatMan” claimed on Thursday that top crypto exchanges including Binance, Gemini, Kraken, and Coinbase could face a lawsuit under the Securities Act for the sale of UST and LUNA in the U.S. In fact, the situation remains critical as UST and LUNA collapse caused investors across the world to lose billions. Despite releasing the Terra 2.0 Revival Plan, Terra founder Do Kwon and Terraform Labs are under government investigations or facing lawsuits in South Korea.
Top Crypto Exchanges Could Face Lawsuits in the U.S.
Terra insider FatMan announced in a tweet on May 26 that a top law firm in the U.S. is preparing for a mass arbitration lawsuit against Binance, Gemini, Kraken, and Coinbase. The crypto exchanges could be alleged under the Securities Act for selling UST and LUNA to U.S. customers.
“I have received word from a verified source at a top law firm in the US that class actions are being prepared against Binance, Gemini, Kraken, and Coinbase under the Securities Act for the sale of UST and LUNA to US customers. They are looking to file within ten weeks.”
Moreover, in a subsequent tweet, the insider clarified that a mass arbitration action is being filed, not a class action. Although, class action lawsuits are also being considered as investors lose trust in Terra.
In fact, the Terra community has criticized the Terra proposal to revive the Terra chain without the UST stablecoin. Moreover, the community is unsure whether the revival plan with increase the price of LUNA and UST tokens with the burn of 1 billion tokens. The price of LUNA and UST currently trading at $0.00016 and $0.094, respectively.
Is Citadel Behind the UST Depegging Attack
Luna Foundation Guard member Remi Tetot has recently suggested that a top investigative journalist may have found proof that Citadel, the large hedge fund behind the GME short, is responsible for the UST de-pegging attack. The attack seems to have kickstarted the LUNA and UST death spiral.
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