Roughly 1,700 UK investors have taken Binance and its founder Changpeng Zhao to court, seeking more than £150 million (approximately $200 million) in damages over allegedly unauthorized crypto derivatives sold to retail users. The group lawsuit was filed in London’s High Court on June 30.
The claim targets Binance Holdings Ltd, Nest Exchange, CZ, and unnamed individuals. At its core, the allegation is straightforward: Binance sold leveraged tokens, futures contracts, and options to UK retail investors starting in late 2019 without proper authorization, violating the Financial Services and Markets Act 2000.
What the claimants are alleging
The UK’s Financial Conduct Authority banned the sale of crypto derivatives to retail consumers on January 6, 2021. The FCA’s reasoning was blunt: these products posed unacceptable risks to retail investors due to extreme volatility, inadequate understanding of the products, and the potential for catastrophic losses.
But the claimants aren’t just pointing to the post-ban period. They allege that Binance was selling these derivatives to UK retail users since late 2019, meaning the platform was operating outside regulatory boundaries even before the FCA’s explicit ban took effect.
