In a class action lawsuit filed Monday in the United States District Court for the Northern District of California, Binance.US (Binance), a major cryptocurrency exchange, has been accused of misleading investors surrounding the Terra blockchain ecosystem.

This is the first major court filing in the United States relating to Terra, whose UST and LUNC tokens crashed in May, wiping out around $40 billion in investor funds.

The lawsuit alleges that Binance marketed Terra’s UST as a stablecoin (a digital asset pegged to a certain value, such as the U.S. dollar), and that this misleading characterization and marketing ultimately left thousands of retail investors caught completely off guard as they had been underprepared and under-informed of the risks associated with their investments.

The lawsuit further alleges that Binance is an unregistered broker-deal or exchange, in violation of securities law, given its listing of UST, which the lawsuit characterizes as an unregistered security.

In a statement provided to CoinDesk, Kyle Roche, a founding partner of Roche Freedman (the law firm that filed the lawsuit) said, “[Binance] recklessly listed and promoted UST as a ‘safe’ stablecoin to those seeking to avoid the volatility of other cryptocurrencies. They, as well as other exchanges that listed UST, should be held accountable."

Binance disputes the allegations made in the lawsuit, saying to CoinDesk, “[Binance] is registered by FinCEN and adheres to all applicable regulations. These assertions are without merit and we will defend ourselves vigorously.”

If the lawsuit successfully holds a centralized exchange culpable for a token’s advertising – rather than the organization that launched it – it will hold wide implications for the shape of the digital asset market moving forward, including increased scrutiny of the due diligence conducted by centralized exchanges prior to accepting tokens and other digital assets for listing on their platforms.