1,700 UK Investors Sue Binance, Zhao for $200 Million

About 1,700 UK investors have filed a class-action lawsuit against Binance and former Chief Executive Officer Changpeng Zhao, seeking 150 million pounds, or about $200 million.

Cointelegraph reported on July 1 that law firm KP Law, which represents the investors, alleges Binance violated the Financial Services and Markets Act 2000 by selling leveraged tokens, futures contracts and options to UK customers without regulatory approval. At the center of the case is the claim that Binance kept offering the products even after the Financial Conduct Authority banned the sale of derivatives to retail customers in January 2021.

KP Law said there were no meaningful barriers preventing UK customers from accessing the products. The Financial Times reported that one of the affected customers, Thomas Sutas, invested more than 100,000 pounds in Binance derivatives and lost the entire amount. Reuters also reported that several UK users suffered losses of tens of thousands of pounds on the products.

Binance told Cointelegraph it would respond to the claim through the appropriate legal process. It added that it would continue to uphold its obligations to users and comply with applicable laws and regulations.

The lawsuit was filed with the High Court in London. Binance affiliate Nest Exchange and unidentified associates were also named as defendants. KP Law said it is still assessing the number of affected customers and that, given Binance's status as one of the world's largest crypto exchanges, a substantial number of users may have been impacted.

The case comes as Binance faces a series of legal and regulatory challenges. The exchange recently failed to secure a license needed to comply with the European Union's Markets in Crypto-Assets, or MiCA, rules by the July 1 deadline. It is also facing allegations that it processed $850 million in transactions for sanctioned financiers linked to Iran's Islamic Revolutionary Guard Corps. Binance has strongly denied those allegations.