Binance and CEO Changpeng “CZ” Zhao hit with near‑£150M lawsuit by U.K. investors
Binance, the world’s largest cryptocurrency exchange by trading volume, and its founder Changpeng “CZ” Zhao have been named in a U.K. lawsuit seeking roughly $200 million (about £150 million), Reuters reports. The claim — filed by almost 1,700 British investors — accuses the exchange of offering complex, leveraged trading products in late 2019 without the necessary regulatory approval. Several claimants say they lost tens of thousands of pounds when those products were available.
Binance responded to Reuters saying the company “remains committed to its obligations to users and to operating in accordance with applicable law” and will defend itself against the suit. A Binance representative did not immediately reply to a request for comment from Decrypt.
Regulatory backdrop: FCA crackdown and MiCA complications
The lawsuit comes against the backdrop of heightened U.K. and European scrutiny of crypto derivatives. In October 2020 the U.K. Financial Conduct Authority (FCA) announced a ban on crypto derivatives for retail customers — saying advanced products were “ill-suited” to retail investors — and that ban took effect in January 2021. In a regulator overview published Tuesday, the FCA noted it has recently restored retail access to select exchange‑traded notes (ETNs) but is still reviewing its stance on retail access to crypto derivatives. “Cryptoassets are high risk investments and will remain high risk under our regime,” the FCA wrote.
Binance’s regulatory troubles in Europe have widened in recent days. Reuters reported that Greece was poised to deny Binance a Markets in Crypto‑Assets (MiCA) license; Binance formally withdrew its MiCA application from Greece last week. A MiCA license would let the exchange operate across EU member states under the new regime starting July 1; without one, Binance cannot offer regulated services in those jurisdictions. The company said it plans to reapply through a different EU member state but has not disclosed which.
What’s next
The U.K. claim could lead to a high‑profile group litigation given the number of claimants and the size of the damages sought. Separately, Binance’s path to offering regulated services in the EU remains uncertain as the firm seeks an alternate MiCA filing route. Both legal and licensing developments are likely to be watched closely by users, investors and other exchanges as regulators continue to tighten rules around high‑risk crypto products.
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