London Suit Hits Binance, CZ for £150M Over Crypto Derivatives

The UK Financial Conduct Authority banned the sale, marketing and distribution of crypto derivatives and crypto exchange-traded notes to retail consumers on Jan. 6, 2021. The FCA said these products were ill-suited for retail buyers because of price volatility, valuation problems and the risk of sudden losses. The lawsuit claims Binance continued to offer some products to UK consumers after the ban took effect. Binance later took steps to limit UK access and required users to provide extra information.

The London case adds to Binance’s legal and regulatory challenges. Last week, its plan to stay in Europe hit a snag after an attempt to secure a license in Greece unraveled before the June 30 deadline under the EU’s crypto regime. The FCA recently warned that Hyperliquid and Hyper Foundation may be offering or promoting financial services in the UK without authorization. That warning came as crypto perpetual futures and other leveraged products drew more attention from regulators in multiple markets.

Binance Australia Derivatives also faced action from the Australian Securities and Investments Commission over claims that retail clients were misclassified. That case, like the UK claim, focuses on how exchanges treat retail users when offering higher-risk crypto products.

The UK suit will test how far investors can use existing financial services law to seek compensation for past crypto trading losses. Binance denies wrongdoing and says it will defend the claim through the courts.