Binance faces £150M UK lawsuit over crypto derivatives

Nearly 1,700 UK investors are suing Binance and Changpeng Zhao for £150 million, alleging unauthorized sales of risky crypto derivatives. Binance denies wrongdoing and will defend itself in court.

Nearly 1,700 UK investors have filed a lawsuit in London’s High Court against Binance and its founder, Changpeng Zhao, seeking at least £150 million ($200 million) in damages. The claimants allege that Binance sold complex and high-risk crypto derivatives, including leveraged products, to retail customers in the UK without proper regulatory approval from the Financial Conduct Authority (FCA) starting in late 2019. Many investors claim to have lost tens of thousands of pounds due to these products. The FCA banned the sale of crypto derivatives to retail clients in January 2021, citing their unsuitability and high risk. The lawsuit argues that Binance breached the Financial Services and Markets Act by offering these products without authorization. Binance has stated it operates in compliance with legal requirements and intends to defend itself against the allegations. The case highlights broader concerns about the responsibility of unlicensed platforms selling high-risk financial products to retail investors.