Nearly 1,700 UK investors have filed a claim against Binance and co-founder Changpeng Zhao at London’s High Court, seeking as much as £150mn over crypto derivatives they say the exchange was never authorised to sell. The claimants argue the products were pushed to retail traders in late 2019 and 2020, before Britain banned them in 2021.
Binance and its billionaire co-founder Changpeng Zhao are being sued at the UK High Court by 1,692 crypto investors who allege the exchange sold risky derivative products to retail traders without approval from the UK financial regulator. Lawyers for the claimants say they are seeking as much as £150mn in the case.
Products sold before the UK ban
The claim was filed on Monday and alleges that in late 2019 and 2020 Binance sold products it was not authorised to sell under the UK’s Financial Services and Markets Act. The case centres on crypto derivatives, which retail traders could buy and use leverage to amplify gains or losses.
KP Law, which represents the claimants, says Binance pushed the products through promotional campaigns, online materials, social media posts and email communications. They argue the derivatives count as specified investments under Financial Conduct Authority rules, and that the exchange was neither authorised nor exempt to offer them. The UK banned retail access to such leveraged products in 2021.
Binance signals it will contest
According to the Financial Times, Binance said in a statement: “We will defend against these claims through the appropriate legal process”. The company added that it remains committed to operating in accordance with applicable law, and has for years battled officials in different countries over its practices.
The dispute revives pressure on Zhao, who pleaded guilty in 2023 to criminal charges related to money laundering and breaching international financial sanctions, agreeing to pay more than $4.3bn in penalties to US authorities. He served four months in a US prison and was later pardoned by President Donald Trump.
A wider test for offshore exchanges
One named claimant, Tomas Sutas from London, put more than £100,000 into the derivative products before his investments were wiped out. The suit names Binance Holdings Ltd, registered in the Cayman Islands, alongside the UAE-based entity Nest Exchange and several unnamed individuals.
The price of bitcoin has nearly halved over the past year and is trading below $60,000, the FT reported. A ruling that lets the claim proceed could open the door to further retail lawsuits in Britain against offshore exchanges.
Sources: Financial Times, Bitcoin.com News
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