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4 min read
Nearly 1,700 British investors have taken Binance to London’s High Court, demanding accountability for what they say were unauthorized financial derivatives sold to them between 2019 and 2020. The total claimed: $200 million.
The investors say Binance offered risky derivative products without ever getting authorization from the UK’s Financial Conduct Authority. Losses ranged from tens of thousands to millions of pounds per investor. The claims cover the period when Changpeng Zhao — Binance’s founder and then-CEO — was running the exchange. A partner at KP Law, the firm leading the action, put the emphasis squarely on financial harm and said the investors want real accountability from both Zhao and the company itself. The lawsuit names Binance’s Cayman Islands entity, the UAE-registered Nest Exchange, and other unnamed parties connected to the platform. Binance said it plans to fight the claims, adding that it takes its obligations to users and its adherence to applicable laws seriously.
Bad timing doesn’t begin to cover it.
The lawsuit landed essentially the day before Binance’s scheduled withdrawal from EU markets — a separate regulatory mess that’s been building for months. The exchange couldn’t secure a license under the EU’s Markets in Crypto-Assets Regulation, known as MiCA, and the July 1 deadline passed without a compliant EU home base in place. Binance had been working on that problem for a while. The original plan was to get licensed through Greece, which seemed promising at one point — Greek regulators were apparently leaning toward approval. But that changed. Binance pulled its Greek application on June 26, and reports pointed to European Central Bank President Christine Lagarde as the reason, with accounts saying she pushed Greece to deny the application despite earlier signals it might go through.
Zhao Points to Politics, Lynch Says Europe Isn’t Over
Changpeng Zhao didn’t stay quiet about it. In an interview, he said political factors blocked their licensing attempts in not one but two EU countries. That’s a pretty direct accusation, and it came straight from the founder. Binance’s Head of Europe and the UK, Gillian Lynch, pushed back on the idea that the company is walking away from the continent entirely. She was clear: Binance isn’t exiting Europe, it’s in a transitional period. CEO Richard Teng backed that up, saying the company is actively working to land a new EU license. No country has been named yet. No timeline was given beyond the obvious fact that the July 1 MiCA deadline has already passed. Binance did tell users they’d still be able to access their funds through the transition, which is probably the most immediate concern for anyone holding assets on the platform in Europe.
The MiCA framework was years in the making. Crypto exchanges operating in the EU had known it was coming, and Binance reportedly spent around six years preparing for it. That makes the last-minute collapse of the Greece application sting more. It’s not like the company was caught off guard by the regulation itself — the political dimension seems to be what tripped them up.
UK Lawsuit Adds Legal Weight to an Already Complicated Picture
The UK action is separate from anything in Europe, but the timing creates a compounding pressure. Two major legal and regulatory fires burning at once. And it’s not just those two fronts. Binance is also under scrutiny from the US Department of Justice, which has been investigating the company’s operations. The exchange is juggling multiple legal challenges across different jurisdictions simultaneously, and each one carries its own set of risks and costs.
Crypto derivatives regulation has been a flashpoint for years. Retail investors getting access to leveraged products without proper warnings or authorization — that’s a pattern regulators in the UK, the US, and elsewhere have gone after hard. The FCA has been particularly aggressive about it. Binance actually stopped offering crypto derivatives to UK retail customers back in 2021 following FCA pressure, but the claims in the current lawsuit go back to 2019 and 2020, before those restrictions kicked in.
The $200 million figure is significant. So is the number of claimants — 1,700 isn’t a fringe group. It’s a large, coordinated legal action, and KP Law is clearly organized around it.
Lynch’s position that Binance isn’t leaving Europe probably matters more in the medium term than the MiCA deadline miss. If the company can find an EU country willing to grant a license, it can come back. The question is which country and how fast. Teng said efforts are ongoing. No specifics yet.
For now, Binance users in the EU still have access to their funds. The exchange made that commitment publicly. Whether that holds through a prolonged licensing gap is unclear.
The UK court case, meanwhile, moves forward. Binance has said it will contest the claims. The Cayman Islands entity and Nest Exchange are both named as defendants.
Frequently Asked Questions
What exactly are the 1,700 UK investors accusing Binance of?
They say Binance offered risky financial derivatives to UK customers between 2019 and 2020 without authorization from the Financial Conduct Authority, causing losses ranging from tens of thousands to millions of pounds per investor.
Why did Binance fail to get a MiCA license in the EU?
Binance withdrew its application through Greece on June 26 after reports that ECB President Christine Lagarde pushed Greece to deny approval; Changpeng Zhao said political factors blocked licensing attempts in two EU countries.
