UK Investors Sue Binance, Zhao for £150 Million Over Unregulated Derivatives
Vexoda Newsroom
A group of UK crypto investors has filed a lawsuit against Binance and its founder, Changpeng Zhao, seeking £150 million in damages over unapproved derivatives offerings.
In a significant legal development for the cryptocurrency industry, approximately 1,700 UK-based traders have joined forces to sue Binance and its CEO, Changpeng Zhao. The lawsuit seeks compensation of around £150 million ($200 million), alleging that Binance offered crypto derivatives without proper regulatory approval.
The case centers on Binance's leverage tokens, futures contracts, and options products, which the law firm KP Law claims violated the Financial Services and Markets Act 2000. According to reports, these offerings continued despite a ban by the Financial Conduct Authority (FCA) in January 2021.
One of the affected investors, Tomas Sutas, a financial controller from the UK, reportedly lost over £132,400 ($132,400) through Binance's derivatives products before they were restricted. Multiple other users also reported significant losses in the tens of thousands of pounds.
Binance has vehemently denied these allegations and stated that it would defend itself legally against the claims. The company maintains its commitment to operating within applicable laws while facing growing regulatory challenges, including recent failures to secure a Markets in Crypto-Assets-compliant license by July 1st deadlines.
The lawsuit was filed at the London High Court, with Binance UK and an affiliated entity called Nest Exchange also named as defendants. This legal action adds to ongoing scrutiny of Binance's operations amid allegations that it facilitated transactions involving sanctioned entities.
This case highlights broader issues in the crypto industry regarding regulation and investor protection. As more countries tighten regulations, such lawsuits could become increasingly common, potentially impacting trading strategies and investment decisions for traders worldwide.
Traders should closely monitor regulatory developments affecting Binance and other major exchanges to avoid similar risks.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.