Binance Sued by Thousands in £250m Crypto Derivative Sales Row
A group action lawsuit against Binance and its founder Changpeng Zhao has gained momentum in the UK, with over 1,000 consumers in England and Wales joining the claim. The total value of the claims issued to date is estimated to be £250m, with an eventual total claim expected to be significantly larger.
The claim was originally filed in the High Court in London this past June and is brought on behalf of consumers who traded cryptocurrency derivative products on Binance.com without authorisation from the Financial Conduct Authority (FCA). The FCA banned Binance Markets Limited, a group company of Binance, from carrying out any regulated activities in the UK without prior written consent from the regulator in 2021.
The claimants contend that Binance knowingly made complex derivative and leveraged products available to users of the platform in the UK from late 2019/early 2020. These products often involved the use of leverage to amplify gains or losses, and futures and options contracts, which allowed users to speculate on future prices of cryptocurrencies.
The claimants argue that Binance was neither authorised nor exempt to sell these specified investments to UK consumers under the Financial Services and Markets Act 2000. Many retail investors based in England and Wales suffered substantial losses as a result of transactions placed with Binance, losing tens of thousands and in some cases millions of pounds.