1,700 UK investors sue Binance and founder for £150m

Almost 1,700 retail investors have launched a group action at the High Court in London seeking at least £150 million from Binance and its founder Changpeng Zhao. The claim alleges Binance sold unauthorised high-risk derivative and leveraged cryptocurrency products to UK users and that those sales caused substantial losses.

The claim, brought on behalf of retail customers in England and Wales, targets trades in derivative products offered on the Binance platform. Lawyers representing the group say many customers lost tens of thousands of pounds, and some incurred losses running into millions. The value of claims in the first tranche is estimated to exceed £150 million, and lawyers expect the overall total to rise as further claims are added.

KP Law represents the investors and alleges that Binance offered the complex leveraged products to UK-based customers from late 2019 without authorisation from the Financial Conduct Authority. The claim says Binance promoted the products in breach of the Financial Services and Markets Act and that selling such instruments to retail customers required FCA approval that Binance did not have.

Hannah Sharp, partner at KP Law, said: “Our clients are ordinary people, many of whom committed significant savings and who have suffered real financial harm. We are determined to hold Binance and its founder, Changpeng Zhao, to account.”

Binance will defend itself, adding in a statement: “Binance remains committed to its obligations to users and to operating in accordance with applicable law.” The exchange has faced regulatory scrutiny in several jurisdictions. It recently informed customers in the European Union it will stop providing services from July 1 after failing to secure a licence under the EU’s Markets in Crypto-Assets Regulation. Greek authorities refused a licence amid concerns about anti-money laundering controls and whether Zhao met national fit-and-proper requirements.

Zhao pleaded guilty in the United States in 2023 to charges related to enabling money laundering on the platform and served a period of imprisonment.

The High Court claim names both the company and Zhao as an individual and will examine whether the derivative products should have been authorised for sale to UK retail customers and whether regulatory protections were breached. Binance has indicated it will contest the claims in court.