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Binance and Changpeng Zhao face claim from 1,700 UK investors over risky derivatives

Binance and Changpeng Zhao face claim from 1,700 UK investors over risky derivatives

The London High Court case seeks more than £150 million over allegations Binance sold unauthorized leveraged tokens and other crypto derivatives to UK consumers from September 2019.

Fact Check
The claim is confirmed by Reuters ('UK investors sue Binance in London for £150 million'), which reports nearly 1,700 British investors suing Binance and Changpeng Zhao for at least £150 million in London's High Court over unauthorized risky derivative products sold from late 2019 in breach of the Financial Services and Markets Act. This matches the claim's details on the number of investors, the amount, the venue, the defendants, the product type, and the timeline. Additional corroboration comes from Global Banking & Finance and Cryptobriefing with identical figures. The FCA's 2021 ban on retail crypto derivatives is consistent across sources.
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Summary

A group of 1,692 investors has filed a class action in London’s High Court against Binance and founder Changpeng Zhao, seeking more than £150 million over allegations the exchange marketed and sold unauthorized crypto derivatives and margin products to UK consumers from around September 13, 2019. Represented by KP Law with Thomas Stas as lead claimant, the investors say Binance offered leveraged tokens, crypto futures, options and margin products without authorization, in alleged breach of the Financial Services and Markets Act. Under that law, transactions arranged by an unauthorized firm can in some circumstances be ruled unenforceable, potentially allowing clients to recover money and losses. Binance said it plans to contest the case. The lawsuit adds to scrutiny of crypto derivatives, which can magnify gains and losses, and echoes earlier U.S. enforcement action that ended in Binance and Zhao pleading guilty in a $4.3 billion settlement.

Terms & Concepts
  • leveraged tokens: Crypto trading products designed to amplify exposure to an underlying asset’s price moves.
  • margin products: Trading arrangements that let investors borrow funds or increase exposure, raising both potential gains and losses.
  • Financial Services and Markets Act: A UK law governing financial services and market conduct.