Almost 1.700 UK investors have sued Binance and founder Changpeng Zhao in London for at least GBP 150 million over unauthorised derivatives sales.
The claimants allege that the crypto exchange sold them complex, high-risk derivative products without the regulatory authorisation required under UK law.
According to the Financial Times, Binance entities knowingly sold leveraged products, which can amplify both gains and losses, from late 2019 onwards, and promoted these products in breach of the Financial Services and Markets Act. Some claimants have said they lost tens of thousands of pounds through these investments.
The case names Cayman Islands-registered Binance Holdings and UAE-registered Nest Exchange as defendants, alongside Zhao, who is also known as CZ, and unnamed individuals said to operate the Binance Trading Platform. The claim was filed in the London High Court.
Furthermore, Binance has said it will defend itself against the claim but declined to comment further given the ongoing litigation. A company spokesperson said Binance 'remains committed to its obligations to users and to operating in accordance with applicable law'.
The UK's Financial Conduct Authority banned crypto companies from offering derivative products to retail customers in 2021. Following the ban, Binance introduced measures to restrict access for UK-based customers, including a requirement for users to complete additional information before accessing certain products. The claim raises questions over whether these restrictions were sufficient to prevent UK retail investors from accessing leveraged products before and after the ban took effect.
Binance currently holds its main operating licence in the UAE. An earlier attempt to secure a licence in Greece did not proceed and was discontinued in June 2026.
Implications for the crypto derivatives market
The claim adds to continued regulatory and legal scrutiny of how crypto exchanges distribute leveraged and derivative products to retail customers in the UK. It also follows a broader pattern of regulators tightening rules around crypto derivatives, with the FCA's 2021 ban forming part of a wider effort to limit retail exposure to complex, high-risk digital asset products. The outcome of the case could have implications for how exchanges structure product access and compliance checks for UK users, as well as for other jurisdictions considering similar restrictions on crypto derivatives distribution.
