Nearly 1,700 British investors have sued Binance and its founder Changpeng Zhao in London over alleged losses linked to cryptocurrency derivatives.
summary
- Nearly 1,700 UK investors accuse Binance and CZ of selling unauthorized cryptocurrency derivative products.
- The claim targets futures, options and leveraged tokens that were allegedly introduced before and after the FCA restrictions.
- Binance says it will defend itself as it faces broader regulatory pressure in Europe and beyond.
Nearly 1,700 British investors are seeking at least £150 million, or about $200 million, from Binance and Changpeng Zhao, according to Reuters. The case was filed in the High Court in London and names Binance Holdings, UAE-registered Nest Exchange, Zhao and “unidentified persons” linked to the Binance trading platform.
The claimants allege that Binance sold risky and complex cryptocurrency derivative products without obtaining the necessary regulatory authorization. They say the products include leveraged tokens, futures and options, which can increase gains but also deepen losses when markets move against traders.
The claim focuses on cryptocurrency derivatives
Investors allege that Binance promoted the products and made them available to UK customers from late 2019. The claim says Binance breached the Financial Services and Markets Act by offering regulated products without approval.
KP Law, which deals with collective action, He says UK consumers may be eligible if they trade Binance tokens, futures or leveraged options. The law firm says the claim does not cover spot cryptocurrency trading losses.
FCA ban frames dispute
The UK Financial Conduct Authority has banned the sale, marketing and distribution of cryptocurrency derivatives and exchange-traded cryptocurrency securities to retail consumers as of January 6, 2021. Financial Supervision Authority He said that these products are not suitable for individual buyers due to price volatility, valuation problems and the risk of sudden losses.
The lawsuit claims that Binance continued to offer some products to consumers in the United Kingdom after the ban imposed by the Financial Conduct Authority (FCA) came into effect. Binance later took steps to restrict access to the UK and required users to provide additional information.
“Binance remains committed to its obligations to users and to operating in accordance with applicable law,” a Binance spokesperson said. The exchange said it would defend itself but declined to comment further on the active lawsuits, according to Reuters.
Pressure is mounting on Binance
The London claim adds to the legal and regulatory challenges Binance faces in several markets.Last week, Binance Planned to remain in Europe after its attempt to obtain a license in Greece failed before the June 30 deadline under the EU cryptocurrency regime.
Meanwhile, the Financial Supervision Authority recently to caution That Hyperliquid and Hyper Foundation may offer or promote financial services in the United Kingdom without authorisation. The warning came as perpetual cryptocurrency futures and other leveraged products attracted more attention from regulators.
like I mentioned Earlier via crypto.news, Binance Australia Derivatives also faced action from the Australian Securities and Investments Commission over allegations that retail clients had been misclassified. This case, like the UK claim, focuses on how exchanges treat retail users when offering high-risk crypto products.
The UK case will test the extent to which investors can use existing financial services law to seek compensation for past cryptocurrency trading losses. Binance denies any wrongdoing and says it will defend the claim through the courts.
