UK Investors Sue Binance for $200 Million in Losses They Chased With Leverage

Nearly 1,700 UK investors have sued Binance and founder Changpeng Zhao (CZ) in London’s High Court, seeking at least £150 million ($200 million) over crypto derivatives they say were sold unlawfully. The claimants argue the exchange marketed risky leveraged products to retail traders from late 2019 without proper authorization. Some say they lost tens of thousands of pounds when those bets turned against them.

The Binance UK Lawsuit Tests Who Pays The case reaches beyond one exchange. It revives a question crypto has long avoided. When an unlicensed platform sells high-risk products, who absorbs the losses, the platform or the trader?

It is a gap UK crypto oversight has not closed. Britain’s Financial Conduct Authority (FCA) banned retail crypto derivatives in January 2021. It cited extreme volatility and a high risk of sudden losses.

The regulator estimated the ban would save retail consumers around £53 million ($70 million). The claimants say Binance pushed such products around that ban, breaching the Financial Services and Markets Act. That statute may matter more than any risk warning.

Under it, deals arranged by an unauthorized firm can be ruled unenforceable, letting clients reclaim their money and losses. The real question is whether buyer beware can survive when the seller broke the rules. Britain already forced Binance to restructure under UK financial promotion rules in 2023.

Defenders of open trading say adults chose leverage with full warnings. Critics counter that an unauthorized seller cannot hide behind the risks its customers accepted. Binance Digs In for a Long Fight Binance has vowed to defend the claim.

A spokesperson told Reuters the exchange honors its legal duties. “Binance remains committed to its obligations to users and to operating in accordance with applicable law.” Follow us on X to get the latest news as it happens The allegations echo earlier ones.

In 2023, the US Commodity Futures Trading Commission charged Binance and CZ with running