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Author: Admin | 2025-04-27
November 29, 2022, an arrest warrant was issued for Daniel Shin by South Korean prosecutors.[58]Controversies and Legal Challenges[edit]TerraUSD (UST) Collapse[edit]Binance was an active investor in Terraform Labs, contributing **$3 million** in funding and an additional **$1 million in BNB tokens**. The company promoted TerraUSD (UST) as a "safe and fiat-backed" stablecoin, which attracted many investors to its platform. After UST’s collapse, which resulted in significant financial losses, Binance came under increased scrutiny for its role in promoting this risky product.[59]In January 2023, Binance invoked an arbitration clause to block a class-action lawsuit filed in the United States by investors affected by the TerraUSD collapse. The lawsuit alleged Binance had sold unregistered securities and failed to disclose the risks associated with UST. The arbitration clause stipulated that all disputes be resolved in Hong Kong, limiting the plaintiffs’ legal options.[60]U.S. Sanctions and Allegations[edit]SEC Settlement with Jump Trading[edit]In October 2024, the U.S. Securities and Exchange Commission (SEC) announced a $123 million settlement with Jump Trading, a key partner in the Terra ecosystem. The SEC alleged that Jump Trading manipulated the market to maintain TerraUSD's (UST) peg to the U.S. dollar, creating the illusion of stability. The funds recovered from this settlement are intended to compensate victims of the UST collapse through a process to be announced.This settlement highlights the role of external entities in supporting and enabling the Terra ecosystem during its rise and subsequent collapse. Exchanges such as Binance, which actively promoted UST as "safe and fiat-backed" while holding a significant portion of the UST supply, are also under scrutiny. Legal experts have drawn parallels to the Madoff case, where banks and intermediaries were held accountable for facilitating fraudulent schemes. This comparison suggests that exchanges like Binance may face future regulatory actions or lawsuits for their involvement in the Terra collapse.[61]Legal Actions in France[edit]In December 2022, 15 French investors filed a complaint against Binance France and Binance Holdings Ltd., accusing the company of: - Misleading advertising by promoting TerraUSD (UST) as a "safe and fiat-backed" stablecoin, - Operating illegally without registration as a Digital Asset Service Provider (DASP) with the Autorité des Marchés Financiers (AMF) before May 2022, - Failing to conduct adequate due diligence on listed assets, leading to significant investor losses.[62]Iron Finance^ a b Miller, Hannah (13 May 2022). "Terra $45 Billion Face Plant Creates Crowd of Crypto Losers". Bloomberg News. Retrieved 15 May 2022.^ Melinek, Jacquelyn (12 May 2022). "Terra resumes blockchain production after halting to prevent hacks amid UST crash". TechCrunch. Retrieved 17 May 2022.^ a b "Terraform Labs files for bankruptcy protection in the US". Reuters. 21 January 2024. Retrieved 21 January 2024.^ a b c Ledbetter, James (13 May 2022). "The Crazy Crypto Meltdown of Terra and LUNA, Explained". The Observer. Retrieved 16 May 2022.^ "Here's how crypto's third largest stablecoin Terra (UST) collapsed". Protos. 10 May 2022. Retrieved 16 May 2022.^ Shen, Muyao (13 May 2022). "Crypto Exchanges Start to Suspend Terra Tokens After Meltdown". Bloomberg News. Retrieved 17 May 2022.^ Geron, Tomio (10 May
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