London's High Court has received a class-action lawsuit. Nearly 1,700 UK investors are jointly suing Binance and its founder Changpeng Zhao, demanding at least £150 million ($200 million). The claim alleges that Binance sold leveraged tokens, cryptocurrency futures, options, and margin trading products to UK retail consumers without obtaining the required regulatory authorization, violating the Financial Services and Markets Act (FSMA).
Core of the Case: Unauthorized Derivative Sales
The claim form, filed by law firm KP Law on June 29, 2026, names lead claimant Tomas Sutas and four defendants: Cayman Islands-registered Binance Holdings Limited, Abu Dhabi-registered Nest Exchange Limited, Zhao personally, and unidentified 'persons unknown' operating the Binance trading platform. Plaintiffs allege these entities promoted and sold the risky derivatives to UK consumers from September 13, 2019 onward without being authorized by the Financial Conduct Authority (FCA).
The FCA banned the sale of crypto derivatives and exchange-traded notes to retail consumers in January 2021, yet the lawsuit claims Binance 'appeared to have no effective barrier preventing UK customers from accessing them.' Some investors say they lost tens of thousands of pounds, with margin calls wiping out accounts.
Legal Grounds: Sections 19 and 21 of FSMA
The claimants anchor their case in the FSMA's general prohibition, alleging that the sale of the products breached Section 19 (carrying on regulated activities without authorization) and their promotion breached Section 21 (financial promotion without authorization). Under Sections 26 and 30, agreements made by an unauthorized firm can be treated as unenforceable, and the claimants seek to recover monies and property paid under each agreement, plus compensation for resulting losses, with interest claimed under Section 35A of the Senior Courts Act 1981. Zhao and Binance Holdings face the same relief as alleged accessories, with plaintiffs arguing they acted pursuant to a 'common design' with the operator defendants.
Binance's Mounting Legal Troubles
Binance has denied wrongdoing and said it will 'vigorously defend' itself through appropriate legal processes. Separately, the exchange faces regulatory headwinds in Europe: after failing to obtain a MiCA license by July 1, it suspended services to users in France, Italy, Poland, and Spain, handing rivals Coinbase and OKX a chance to court departing customers. Zhao has claimed Binance's withdrawn Greek application was close to approval before political pushback. Reports also surfaced that ECB President Christine Lagarde signaled to Greek officials that Binance was unwelcome in Europe—neither the ECB nor Greek authorities have confirmed. The Wall Street Journal previously cited internal investigators alleging $1.7 billion in transfers involving Iranian and Russian actors, which Binance disputed.