A group of over 1,700 British cryptocurrency investors has initiated a substantial $200 million class action lawsuit against Binance, the world’s largest crypto exchange, and its founder Changpeng Zhao. The legal action, lodged in London courts, alleges that Binance illegally offered and sold high-risk leveraged products to UK retail investors in violation of the country’s Financial Services and Markets Act.
The core of the claim stems from a 2021 ban imposed by the Financial Conduct Authority (FCA), which prohibited the sale of crypto derivatives and leveraged tokens to retail consumers due to their extreme volatility and potential for total loss. The plaintiffs argue that Binance sidestepped this ban and continued to market these products to UK-based users, effectively bypassing local consumer protection frameworks. The lawsuit seeks approximately £150 million (roughly $200 million) in damages, though the final amount will be determined by the court.
Binance has publicly stated its intention to “actively defend” against the allegations, asserting that it has complied with all applicable legal obligations. However, this is not the exchange’s first major legal confrontation. In 2023, Binance and Changpeng Zhao pleaded guilty to charges by the U.S. Commodity Futures Trading Commission and Department of Justice, resulting in a landmark $4.3 billion fine for operating an unregistered derivatives exchange and violating anti-money laundering laws. Zhao also stepped down as CEO as part of that settlement. The UK case now draws from that precedent, contending that Binance’s business model prioritizes expansion over regulatory adherence.
Legal experts note that the outcome could set a powerful precedent for crypto exchange accountability in the UK. If the court rules in favor of the investors, it could open the door to similar class actions against other platforms and clarify the extraterritorial reach of British financial regulations in the digital asset space. The case, which has gathered nearly 1,700 claimants, underscores the escalating tension between global crypto exchanges and national watchdogs, with its resolution likely to reverberate across the industry.
