Binance And CZ Hit With $200M UK Lawsuit

1,700 Investors File High Court Claim Over Unauthorized Derivatives

Nearly 1,700 UK investors have sued Binance and founder Changpeng Zhao (@cz_binance) in London's High Court, seeking at least £150 million ($200 million) over crypto derivatives they say were sold unlawfully. The case, officially filed on Tuesday, June 30, is being brought by law firm KP Law on behalf of the claimant group.

The claimants say Binance marketed complex crypto derivatives to retail investors starting in late 2019, a full two years before the UK's Financial Conduct Authority formally restricted retail access to such products. Some of the claimants said they had lost tens of thousands of pounds, alleging Binance entities knowingly sold leveraged products, which can amplify gains or losses, and promoted them in breach of the Financial Services and Markets Act.

The High Court action names Binance Holdings Ltd, which is based in the Cayman Islands, alongside UAE-registered entity Nest Exchange, founder Changpeng Zhao, and unnamed individuals. At the heart of the case is a straightforward argument: selling leveraged crypto derivatives to UK retail customers without FCA authorization violates the Financial Services and Markets Act.

Binance Vows to Defend, But Faces Broader Regulatory Pressure

Binance, the world's largest crypto exchange, vowed to defend itself but declined to comment further on ongoing litigation, with a spokesperson saying it "remains committed to its obligations to users and to operating in accordance with applicable law."

Britain's Financial Conduct Authority banned retail crypto derivatives in January 2021, citing extreme volatility and a high risk of sudden losses. The lawsuit argues Binance was already operating outside acceptable lines before that ban existed, and continued in violation of the Financial Services and Markets Act afterward.

The lawsuit arrives at a difficult moment for the exchange. Binance is now defending a nine-figure UK lawsuit over pre-2021 conduct at the exact moment its European licensing strategy has collapsed and Britain's regulator has just finished writing the rulebook Binance will need to pass to keep operating there long-term. In 2023, Binance and CZ pleaded guilty in the United States to anti-money-laundering and sanctions violations, agreeing to a $4.3 billion settlement. CZ served four months in prison, stepped down as chief executive in favour of Richard Teng, and was later pardoned by President Trump in October 2025.

If the claimants succeed, even partially, it would set a significant legal precedent for how crypto exchanges can be held accountable for selling complex financial products across borders without local authorization.

Sources:
Reuters via Global Banking and Finance: UK Investors Sue Binance in London Over £150 Million Crypto Losses
BeInCrypto: UK Investors Sue Binance for $200 Million in Losses They Chased With Leverage
Decrypt: Binance, Changpeng Zhao Sued for $200M by British Investors