1,700 UK investors sue Binance, CZ for $200M over derivatives

A group of roughly 1,700 UK investors filed a lawsuit in London's High Court on June 30, seeking more than £150 million (about $200 million) in damages from Binance and its founder Changpeng Zhao. The claim alleges the exchange sold crypto derivatives to UK retail users without proper authorization, starting in late 2019.

The lawsuit targets Binance Holdings Ltd, Nest Exchange, Zhao, and unnamed individuals. The core allegation: Binance offered leveraged tokens, futures contracts, and options to UK retail investors without the required permissions under the Financial Services and Markets Act 2000.

The UK's Financial Conduct Authority banned crypto derivatives sales to retail consumers on January 6, 2021. The regulator argued the products carried unacceptable risks – extreme volatility, poor consumer understanding, and potential for total loss. The claimants say Binance was already selling these products to UK retail users before the ban took effect. That means the platform operated outside regulatory boundaries for more than a year before the FCA's explicit prohibition.

Individual losses among the claimants reportedly run into tens of thousands of pounds each.