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

Nearly 1,700 retail investors in the U.K. have filed a claim against Binance and founder Changpeng CZ Zhao seeking roughly £150 million, alleging the exchange offered leveraged and other complex trading products that caused significant losses.

The claimants say many lost tens of thousands of pounds each and contend the products were made available in late 2019 without the necessary U.K. regulatory approval and were unsuitable for retail customers.

The case focuses on offerings available before the Financial Conduct Authority announced a ban on crypto derivatives for retail customers in October 2020; that ban took effect in January 2021.

Plaintiffs allege they were not adequately warned about the risks and that Binance failed to secure regulatory approval before offering the products. The claim names the global exchange and Zhao as defendants and seeks roughly £150 million in damages.

Binance responded that it remains committed to its obligations to users and to operating in accordance with applicable law, and warned it will defend itself against the claim. A spokesperson did not immediately respond to requests for further comment.

The U.K. regulator has described cryptoassets as high-risk investments and recently lifted its ban on retail access to certain exchange traded notes while continuing to review retail access to crypto derivatives.

Binance, the largest crypto exchange by trading volume, has taken other steps in Europe. The company withdrew a Markets in Crypto Assets application filed in Greece and said it will seek authorization from another EU member state ahead of the EU framework coming into effect on July 1.

The claim is now before a U.K. court. No hearing dates were disclosed and the court will determine whether the defendants are liable for the losses alleged by the group of investors.