UK Investors Sue Binance for $200 Million

Nearly 1,700 investors from the United Kingdom have filed a lawsuit against Binance and its founder, Changpeng Zhao, seeking £150 million (around $200 million) in damages. The claim alleges that the cryptocurrency exchange offered crypto derivatives without the required regulatory approval.

The case was prepared by law firm KP Law, which argues that Binance breached the UK's Financial Services and Markets Act 2000 by making leveraged tokens, futures contracts, and options available to retail clients. According to the claim, these products remained accessible even after January 2021, when the UK's Financial Conduct Authority (FCA) banned the sale of crypto derivatives to retail investors. KP Law maintains that UK users were still able to trade these instruments despite the restrictions.

Binance has said it will vigorously defend itself against the allegations in court. The company also insists that it operates in compliance with applicable regulations and continues to meet its obligations to customers.

According to the Financial Times, one of the claimants is Tomas Sutas, a financial controller who invested more than £100,000 (approximately $132,400) in Binance's derivative products. His investment is reported to have lost its entire value. Reuters has also reported on other UK investors who allegedly lost tens of thousands of pounds trading similar products on the platform.

KP Law says it is still assessing the total number of affected investors. Given Binance's global reach and large customer base, the firm believes the case could ultimately involve a much broader group of users.

Binance's operations in the UK have faced regulatory restrictions since June 2021, when the FCA informed Binance Markets Limited that it was not permitted to carry out regulated activities without prior written authorization from the regulator.

Reuters reported that the lawsuit has been filed with the High Court in London. In addition to Binance and its founder Changpeng Zhao, the claim also names Nest Exchange, a company associated with the cryptocurrency exchange, as a defendant.