Lawsuit Filed Against Binance.US for Promoting, Selling UST and LUNA

A class-action lawsuit was filed today against Binance.US, alleging that the cryptocurrency exchange misled consumers about the safety of Terra’s stablecoin UST, and native token LUNA.

The suit also claims Binance violated federal law both by selling UST and LUNA, cryptocurrencies that the plaintiffs claim are securities that should have been registered with the SEC, and by operating as an unregistered securities exchange.

Binance Resumes Bitcoin Withdrawals After Several Hours of Stuck Transaction

Binance on Monday morning temporarily paused bitcoin withdrawals “due to a stuck transaction causing a backlog.”

Binance founder and CEO Changpeng Zhao said the problem would be resolved in around 30 minutes. He later said it would take “a bit longer to fix than [his] initial estimate.” Binance said in a tweet at 11:32 a.m. on Wall Street that bitcoin withdrawals had resumed.

How Binance became a hub for hackers, fraudsters and drug sellers

  • In as little as nine minutes, using only encrypted email addresses as identification, the Lazarus hackers created Binance accounts and traded crypto stolen from Eterbase, the Slovakian exchange, according to account records that Binance shared with the police and that are reported here for the first time.
  • As early as March 2018, Hydra users recommended on the site’s Russian-language forums that buyers use Binance to make purchases, citing the anonymity Binance afforded its clients at the time by allowing them to register with just an email address.

The Story of Binance Becoming a Hub for Hackers, Fraudsters and Drug Sellers

  • For five years, the world’s largest cryptocurrency exchange Binance served as a conduit for the laundering of at least $2.35 billion in illicit funds, a Reuters investigation has found.
  • “Binance had no idea who was moving money through their exchange” because of the anonymous nature of the accounts, said Eterbase co-founder Robert Auxt.
  • As Reuters reported in January, Binance kept weak money-laundering checks on its users until mid-2021, despite concerns raised by senior company figures starting at least three years earlier.

Crypto and Money Laundering: An Inconvenient Truth

  • Crypto is an awful vehicle for laundering money for a few reasons. One, KYC is stringent in the industry and it’s simply much easier to open a bank account with fake identification documents at a small local or regional bank. Two, you simply cannot move large sums of money into crypto without people noticing, and three, it is trackable. Even most so-called  “privacy coins” are much more transparent and easier to trace than traditional cash.

    Unlike cash, which is nearly impossible to track, Blockchain has proven to be one of the most powerful tools for law enforcement. The immutable, public nature of the blockchain makes crypto a poor choice for money laundering because it allows law enforcement to uncover and trace money laundering far easier than cash transactions. 

  • At Binance, after joint efforts with Chainalysis, demixing, and working with law enforcement, Binance was able to freeze an estimated $5.8M worth of related cryptocurrency.
  • While Binance is unable to comment on its specific correspondence with Slovakia’s national police, we can say that following the allegation about Lazarus opening dozens of anonymous accounts on crypto exchanges, we fully cooperated with requests received from Slovak authorities and helped them to identify both accounts at Binance as well as other exchanges.