Nearly 1,700 UK investors have filed a London lawsuit against Binance and founder Changpeng Zhao, seeking at least £150 million over alleged losses tied to crypto derivatives.
The claim targets Binance entities, Zhao and unnamed operators connected to the Binance trading platform. Investors allege the exchange offered complex products to everyday UK customers without the regulatory approval needed under the Financial Services and Markets Act.
The products named in the action include leveraged tokens, futures contracts and options, all of which can amplify losses when crypto prices move against traders. The claim focuses on activity that began in late 2019 and continued around the period when the UK tightened rules on retail access to crypto-linked derivatives.
Binance has said it plans to defend itself. The filing does not establish liability, and the allegations will need to be tested through the court process.
FCA Ban Sits At Center Of The Case
The UK’s Financial Conduct Authority banned the sale, marketing and distribution of crypto derivatives and crypto exchange-traded notes to retail consumers from January 6, 2021.
The FCA argued at the time that retail consumers could be harmed by the complexity of the products, the difficulty of valuing underlying cryptoassets, market abuse concerns, extreme volatility and limited understanding among ordinary buyers. The regulator said the ban would apply to derivatives and ETNs referencing unregulated transferable cryptoassets such as Bitcoin, Ether and XRP.
Binance also faced a separate UK restriction in 2021. The FCA said Binance Markets Limited was not permitted to undertake regulated activity in the UK without prior written consent, and no other Binance Group entity held UK authorization, registration or a license to conduct regulated activity in the country.
The lawsuit now tests whether UK customers were improperly exposed to derivatives products through Binance despite that regulatory backdrop. The investors’ case also raises questions about geoblocking, customer safeguards, product access and whether Binance took enough steps to stop UK retail users from trading products that the FCA had restricted.
UK Case Adds To Binance Regulatory Pressure
The London lawsuit arrives while Binance is already under pressure in Europe. The exchange recently withdrew its Greek MiCA license application and began seeking another authorization route before the EU’s July 1 deadline.
That licensing setback forced Binance to reassure users in affected European markets. Richard Teng later told EU users that assets remained safe and withdrawals stayed available as the exchange adjusted access under MiCA.
The UK case is separate from the EU licensing issue, but both point to the same larger problem for global exchanges: old cross-border product access is being tested against stricter local rules. Derivatives, leverage, retail eligibility, marketing controls and entity authorization are now central to how regulators judge whether a platform can serve users in a market.
The claim was filed in London’s High Court by 1,692 investors and seeks at least £150 million in damages from Binance, Zhao and related defendants.
