Nearly 1,700 UK investors have sued Binance and its co‑founder Changpeng “CZ” Zhao in London, accusing the exchange of selling them unauthorized crypto derivatives and seeking around $200 million in damages. The claimants say Binance pushed risky leveraged products on everyday traders from late 2019 without the regulatory approval required in the UK.
According to Reuters, 1,692 British investors filed the claim in the High Court against Cayman‑registered Binance Holdings, UAE‑registered Nest Exchange, CZ, and “persons unknown” who operate the Binance trading platform.
The lawsuit alleges Binance entities “knowingly sold investments such as leveraged products, which can amplify gains or losses, from late 2019 and promoted them in breach of the Financial Services and Markets Act.” Some investors involved say they lost tens of thousands of pounds trading those instruments.
Law firm KP Law, which is leading the case, argues that Binance offered complex crypto derivatives to UK consumers without the required authorization.
Its materials say that from 2019 onward, UK users could trade Binance leveraged tokens, futures contracts, and options through the platform. The firm says Binance “inappropriately sold” these products to retail customers without fully explaining their risks.
UK Rules on Crypto Derivatives
The legal action rests on the UK’s strict stance toward crypto derivatives. Britain’s Financial Conduct Authority (FCA) banned crypto companies from offering derivatives like futures, contracts for difference, and certain leveraged products to retail customers in January 2021, warning that such instruments could cause “serious harm” because of extreme volatility and limited transparency. The FCA also regulates some crypto-asset derivatives and securities even though it does not regulate spot bitcoin or ether directly.
In June 2021, the FCA issued a supervisory notice that imposed requirements on Binance Markets Limited and later said the firm “is not permitted to undertake any regulated activity in the UK” without prior consent.
It also warned that other Binance Group entities did not hold UK authorization or registration to conduct regulated business. Those statements now form part of the context for the investors’ claim that Binance sold regulated derivatives to UK retail traders without approval. Binance has vowed to defend itself but declined to comment in detail, citing ongoing litigation.
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