Binance Faces £250m Group Action Over Alleged Unauthorized Crypto Sales
A group action lawsuit has been filed against Binance and its founder Changpeng Zhao over alleged unauthorized crypto sales to UK consumers. The claim, which was originally filed in June this year, represents around 2,700 consumers who traded cryptocurrency derivative products on the Binance.com platform.
The total value of the claims issued to date is estimated to be in excess of £250m, with an eventual total claim expected to be significantly larger. The Financial Conduct Authority (FCA) banned Binance Markets Limited from carrying out any regulated activities in the UK without prior written consent from the regulator in June 2021.
The claimants contend that Binance knowingly made these complex products available to users of the platform in the UK from late 2019/early 2020, promoting their sale through promotional campaigns and online materials. Only authorized persons or exempt persons were permitted to sell these specified investments within the scope of the Financial Services and Markets Act 2000 (FSMA).
The claimants believe that Binance was neither authorized nor exempt, resulting in many retail investors suffering substantial losses as a result of transactions placed with Binance. Hannah Sharp, partner at KP Law, stated: 'It is public knowledge that Binance have failed to cooperate with regulators.'