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Nearly 1,700 British retail investors have filed suit against Binance and its founder Changpeng Zhao in London’s High Court, chasing more than £150 million — roughly $200 million — in damages. The claim: Binance sold them risky leveraged crypto derivatives without the legal right to do so.
The investors say Binance started marketing these leveraged products to UK retail clients in late 2019. No authorization. No proper licensing. Just aggressive promotion of high-risk instruments to ordinary people who, in many cases, had little idea what they were buying. The UK’s Financial Conduct Authority banned retail crypto derivatives outright in January 2021, citing extreme volatility and the very real danger of sudden, catastrophic losses. The FCA said at the time that the ban was projected to save retail investors around £53 million — about $70 million. The claimants say Binance kept pushing the products even after that ban landed, which would put the exchange in direct violation of the Financial Services and Markets Act. Under that law, transactions arranged by unauthorized entities can be ruled unenforceable, meaning clients could potentially claw back their investments and any associated losses.
That’s a big deal.
The “Buyer Beware” Defense Gets Tested
The whole case basically comes down to one question: does caveat emptor — buyer beware — still hold when the seller was operating outside the law to begin with? Binance and defenders of open trading will probably argue that retail traders accepted leverage willingly, with warnings in place. Critics say that argument falls apart the moment the platform selling those products didn’t have legal authority to sell them at all. You can’t hide behind risk disclosures if you weren’t supposed to be in the market in the first place.
Binance has said it will fight the claims. A company spokesperson said Binance takes its legal obligations seriously. That’s pretty much all they’ve offered publicly so far.
It’s not the first time Binance has been here. In 2023, the US Commodity Futures Trading Commission charged Binance and Changpeng Zhao with running an illegal derivatives exchange. That case ended in a $4.3 billion settlement — one of the largest in crypto history. Zhao himself was pardoned in the US, but he’s still named personally in the London suit.
Who’s Actually Named — and Why It Gets Complicated
The lawsuit names several entities: Cayman Islands-registered Binance Holdings, UAE-based Nest Exchange, and a string of unnamed operators. That corporate spread across multiple jurisdictions is probably going to make enforcement messy. Even if the London High Court rules in favor of the claimants, actually collecting on that judgment is a different problem entirely. Binance’s operations are fragmented across legal structures in different countries, which raises real questions about whether a UK ruling could be enforced effectively.
And Binance’s position in Europe isn’t exactly strong right now. The company withdrew from European markets after failing to secure an EU license. Its main authorization sits in the UAE. That geographic reality could complicate how it responds to the case — and how it operates going forward if the court rules against it.
The case also lands at a moment when regulators globally are still figuring out how to handle crypto exchanges that operated in legal gray zones for years. Binance restructured under UK financial promotion rules back in 2023, but the claimants are focused on what happened before that — specifically the period when the FCA ban was either incoming or already in effect and the products were still being sold.
Should the court find these derivative deals void under the Financial Services and Markets Act, it won’t just hurt Binance. It would set a precedent that could shake up how exchanges everywhere think about selling high-risk products without proper licensing. The caveat emptor principle has been a kind of informal shield for crypto platforms for years. A ruling against Binance in London could crack that shield wide open.
Changpeng Zhao’s personal inclusion in the suit is worth watching too. He’s no longer running Binance day-to-day, but his name is on the claim. The source didn’t specify what specific role the claimants attribute to him personally in the alleged unlawful sales — that’ll likely be fleshed out as the case moves through court.
No trial date has been set publicly. No details yet on how long proceedings are expected to run.
The claimants are seeking £150 million in damages from a platform that, at its peak, was the largest crypto exchange in the world by trading volume.
Frequently Asked Questions
What are the UK investors claiming against Binance?
Nearly 1,700 UK retail investors claim Binance sold them risky leveraged crypto derivatives without proper authorization, starting in late 2019, and are seeking over £150 million ($200 million) in damages in London’s High Court.
Was Changpeng Zhao pardoned before this UK lawsuit?
Yes — Zhao was pardoned in the US, but he is still personally named as a defendant in the London High Court case brought by UK investors.
