Nearly 1,700 British retail investors have filed a £150 million lawsuit against Binance and co-founder Changpeng Zhao at the UK High Court, alleging the exchange illegally sold leveraged derivatives without proper authorisation in 2019 and 2020. The claimants, represented by KP Law, argue Binance marketed products requiring Financial Conduct Authority approval under the Financial Services and Markets Act despite lacking the necessary licence or exemption.
The lawsuit involves ordinary investors who lost substantial sums, with individual losses ranging from tens of thousands to millions of pounds. One claimant reportedly invested over £100,000 before losing his position. The activity predates the FCA’s January 2021 ban on crypto derivatives sales to retail clients, which cited extreme volatility and valuation difficulties.
Binance has not acknowledged service but stated it will defend against claims through appropriate legal channels. The exchange continues facing regulatory pressure globally, following a 2023 US guilty plea on money laundering charges that resulted in $4.3 billion in penalties and Zhao’s resignation.
FXnCO Insight
UK-based crypto platforms should immediately audit historical client onboarding and product offerings against FCA authorisation requirements to assess potential retrospective liability exposure.
Source: Finance Magnates