Binance Faces £250m Group Action Over Alleged Unauthorized Crypto Sales

A group action lawsuit has been filed against Binance and its founder Changpeng Zhao in the UK, alleging that the crypto trading platform sold unauthorized high-risk derivative products to consumers. The claim, which was originally filed in June, represents over 2,700 consumers who traded on the Binance.com platform.

The Financial Conduct Authority (FCA) banned Binance Markets Limited from carrying out regulated activities in the UK without prior written consent in June 2021. However, it is alleged that Binance continued to sell complex derivative and leveraged products to UK-based users of the platform without authorization.

The claim argues that these products, which involved the use of leverage and futures and options contracts, were specified investments within the scope of the Financial Services and Markets Act 2000 (FSMA). Only authorized persons or exempt persons were permitted to sell these products to UK consumers, but Binance was neither authorized nor exempt.

Hannah Sharp, partner at KP Law, said: 'It is public knowledge that Binance have failed to cooperate with regulators. That's why their UK group company, Binance Markets Limited, was barred from regulated activity in the United Kingdom in 2021.'