UK Crypto Investors File $200M Lawsuit Against Binance and Changpeng Zhao

One Binance customer said that the equivalent of more than $132,000 was lost through the crypto exchange’s derivatives products before restrictions were placed on Binance.

Nearly 1,700 UK investors are reportedly pursuing legal action against Binance and its founder, Changpeng Zhao, seeking 150 million British pounds (approximately $200 million) over allegations that crypto derivatives were offered and sold by the exchange without the required regulatory approval.

According to the law firm representing the investors, KP Law, the Financial Services and Markets Act 2000 was breached by Binance’s leveraged tokens, futures contracts and options products, and these offerings continued to be made available even after such products were prohibited for retail customers by the Financial Conduct Authority in January 2021.

“There appeared to be no effective barrier preventing UK customers from accessing them,” the law firm said.

Binance told that these claims would be challenged through the appropriate legal process and added that it remains committed to fulfilling its obligations to users while operating in compliance with applicable laws.

The lawsuit adds to the expanding list of legal and regulatory challenges faced by the crypto exchange, including its recent failure to obtain a Markets in Crypto-Assets-compliant license from a European Union member state before the July 1 deadline.

Binance has also faced allegations that transactions worth $850 million linked to a sanctioned Iranian financier were facilitated and ultimately flowed to Iran’s Islamic Revolutionary Guard Corps. Those allegations have been strongly denied by the crypto exchange.

Binance UK Users Report Losses of Tens of Thousands of Pounds#

One of the affected customers, Tomas Sutas, a financial controller, allegedly invested more than 100,000 British pounds (about $132,400) in Binance’s derivatives products before the value of his holdings was completely wiped out, according to the Financial Times.

Reuters also reported that losses amounting to tens of thousands of pounds were suffered by multiple UK users through these products.

KP Law said it is still working to identify the full number of customers affected by the matter.

“While the exact number of affected UK customers is not publicly available, Binance remains one of the world’s largest cryptocurrency exchanges, meaning a significant number of users may have been exposed to these issues.”

Binance’s operations in the UK became heavily restricted in June 2021 after Binance Markets Limited was informed by the Financial Conduct Authority that it could not operate in the region without obtaining written consent.

Reuters noted that the lawsuit was filed in the London High Court.

The Binance-affiliated Nest Exchange, along with “persons unknown,” was also named as a defendant in the lawsuit.