Nearly 1,700 British investors have initiated legal proceedings in London against cryptocurrency exchange Binance and its founder, Changpeng Zhao, seeking damages of at least £150 million (approximately $200 million). The core of the claim centres on allegations that the crypto trading platform unlawfully sold complex and high-risk derivative products to UK customers without the requisite regulatory authorisation.
The claimants, some of whom report substantial losses amounting to tens of thousands of pounds, contend that Binance entities engaged in the sale of leveraged products – instruments capable of amplifying both gains and losses – from late 2019. They further allege that these promotions constituted a breach of the UK’s Financial Services and Markets Act.
Binance, recognised as the world’s largest cryptocurrency exchange, has stated its intention to vigorously defend itself against these accusations, though it has declined to provide further comment on the ongoing litigation. A spokesperson for the company affirmed, “Binance remains committed to its obligations to users and to operating in accordance with applicable law.”
The lawsuit, filed in the London High Court, names Cayman Islands-registered Binance Holdings, UAE-registered Nest Exchange, Mr. Zhao (widely known as CZ), and “persons unknown” operating the Binance Trading Platform as defendants. This legal challenge comes in the wake of regulatory shifts in the UK, where the Financial Conduct Authority (FCA) prohibited crypto companies from offering derivatives to retail customers in 2021. Following this, Binance implemented measures to restrict UK access, including requiring users to provide additional information. The company’s primary operational license is currently held in the United Arab Emirates, following the recent unravelling of its attempts to secure a license in Greece.
This development underscores the increasing scrutiny faced by major cryptocurrency exchanges regarding their product offerings and compliance with financial regulations in key jurisdictions. For legal professionals, compliance officers, and corporate executives, the case highlights the critical importance of understanding and adhering to evolving regulatory frameworks governing digital assets and financial derivatives, particularly concerning cross-border operations and investor protection. Investors and business leaders in the sector should closely monitor the proceedings for potential implications on market practices and regulatory enforcement.
... UK Investors Launch £150 Million Lawsuit Against Binance Over Alleged Unauthorised Derivative Sales ... Naijaonpoint.