Binance Sued by 1,700 UK Investors Over Unauthorized Crypto Derivatives

Nearly 1,700 UK investors have sued Binance and its co-founder Changpeng 'CZ' Zhao in London, accusing the exchange of selling them unauthorized crypto derivatives and seeking around $200 million in damages. The claimants say Binance pushed risky leveraged products on everyday traders from late 2019 without the regulatory approval required in the UK.

According to Reuters, 1,692 British investors filed the claim in the High Court against Cayman-registered Binance Holdings, UAE-registered Nest Exchange, CZ, and 'persons unknown' who operate the Binance trading platform. The lawsuit alleges Binance entities 'knowingly sold investments such as leveraged products, which can amplify gains or losses, from late 2019 and promoted them in breach of the Financial Services and Markets Act.'

The law firm KP Law, which is leading the case, argues that Binance offered complex crypto derivatives to UK consumers without the required authorization. It says that from 2019 onward, UK users could trade Binance leveraged tokens, futures contracts, and options through the platform.