Binance and its founder, Changpeng Zhao (CZ), are now facing a new legal dispute in the United Kingdom. A group made up of about 1,700 investors filed a class action lawsuit in the High Court of London, seeking approximately US$ 200 million in compensation for alleged losses related to cryptocurrency derivatives trading.
According to the claimants, the exchange marketed financial products considered complex to retail investors between late 2019 and 2020 without having the necessary authorization from the United Kingdom's Financial Conduct Authority (FCA).
Among the products cited in the lawsuit are leveraged tokens, options, cryptocurrency contracts, and futures. The investors allege that these instruments are classified as "specialized investments" under British law and, therefore, should follow specific rules set out in the Financial Services and Markets Act.
The claimants also state that Binance continued offering these products even after the FCA banned their commercialization in 2021. In addition, they accuse the company of promoting the derivatives through advertising campaigns, online content, social media posts, and communications sent by email to clients.
Lawyer Hannah Sharp, a partner at the firm responsible for representing the investors, stated that her clients recorded significant financial losses when trading these products. According to the lawsuit, some investors lost tens of thousands of dollars, while others claim to have accumulated losses that reached into the millions.
Binance confirmed that it is aware of the lawsuit, but said it will not comment on the case while the proceedings are ongoing.
“We do not comment on ongoing legal proceedings. We will defend ourselves against these allegations through the appropriate legal procedures, in due course,” the company said in a statement.
The new lawsuit expands the list of regulatory challenges faced by the exchange in recent years. Recently, the company also encountered difficulties obtaining an operating license in the European Union under the new requirements of the MiCA regulation.
After this setback, Binance said it would discontinue certain services in the region. Subsequently, Changpeng Zhao stated that the company remains committed to the European market and intends to apply for a new license in another jurisdiction that meets regulatory requirements.
Regulatory changes gained momentum after the European Securities and Markets Authority (ESMA) determined that digital asset companies without authorization must cease their operations by 1º de julho if they did not obtain a MiCA license within the established deadline.