Binance and its founder Changpeng Zhao are facing a lawsuit in the United Kingdom seeking close to Euro 150 million, roughly $200 million, from investors who say the exchange gave retail customers access to complex leveraged trading products without regulatory approval.
The claims trace back to late 2019, when highly speculative derivative instruments were still accessible to ordinary British investors through the platform. Plaintiffs argue that the absence of proper safeguards and oversight led directly to heavy losses, with some individuals reportedly losing tens of thousands of dollars within just a few trading sessions.
Binance spokesperson told Reuters, “Binance remains committed to its obligations to users and to operating in accordance with applicable law,” adding that the exchange intends to defend itself against the suit.
The regulatory backdrop to the case matters. The FCA banned crypto derivatives for retail customers in October 2020, describing the products as “ill-suited” to that category of investor, with the ban taking effect in January 2021. The claimants argue that Binance violated the Financial Services and Markets Act by making those instruments available in the period before the ban came into force.
The FCA’s relationship with Binance has been fraught for years. The regulator issued a consumer warning against Binance Markets Limited in June 2021 and prohibited it from carrying out regulated activities without prior written consent.
The entity later applied to cancel its own FCA permissions, a process completed in May 2023, leaving Binance without any UK authorization at all. The FCA has also made its broader view on digital assets clear, writing in a recent policy update that “cryptoassets are high risk investments and will remain high risk under our regime.”
While the FCA recently lifted its ban on retail access to select exchange traded notes, it is still reviewing its position on whether retail investors should be allowed to access crypto derivatives more broadly.
The UK lawsuit lands at a difficult moment for Binance across Europe. Last week, the firm formally withdrew its MiCA license application in Greece, one week after Reuters reported the application was headed for rejection. A MiCA license would have allowed Binance to serve users across EU member states starting July 1.
