Binance And CZ Sued By 1,700 UK Investors

The judicial and regulatory noose tightens further around the historic giants of the crypto ecosystem, reminding us that the past always catches up with the boldest players. As the industry strives to group under increasingly strict compliance banners, strategic decisions made at the heart of the previous bull bubble come back to haunt its flagship figures. This dynamic is perfectly illustrated by the litigation on British soil involving the world’s leading exchange platform and its emblematic founder.

A Group of 1,700 British Investors Launches Major Financial Offensive Against Binance

Binance founder Changpeng “CZ” Zhao and the exchange are being sued in the UK as part of a class action, while American investors had already obtained a trial.

Indeed, the case is based on the following points :

• Number of plaintiffs : the lawsuit is formalized by a group of nearly 1,700 British investors ;
• Amount claimed : the group of plaintiffs demands massive compensation estimated at nearly $200 million, approximately £150 million ;
• Reason for complaint : the action alleges that the platform offered sophisticated and particularly risky financial instruments, notably leveraged trading products, without holding the required regulatory approvals in the territory ;
• Defense position : when asked about its strategy in response to this offensive, the firm stated : “the Binance platform is committed to its obligations towards users and to operating in compliance with applicable law”.

The grievances date back to the end of 2019, a time when these highly speculative financial instruments were still freely accessible to British retail investors on the exchange platform. The plaintiffs argue that the lack of safeguards and proper oversight directly led to massive losses, some having lost tens of thousands of dollars in just a few trading sessions.

This group action aims to show that offering these financial services violated the local legal framework at the time, holding direct civil liability of the company and its historic founder, Changpeng Zhao, despite the group’s subsequent restructurings.

The FCA’s Axe and the Major Purge of Derivatives

Although the losses invoked by the plaintiffs occurred at the end of 2019, the Financial Conduct Authority (FCA) ruled in October 2020 by announcing a total ban on crypto derivatives for retail investors. This measure came into effect in January 2021. The UK financial regulator judged then that these advanced products are structurally “unsuitable” for non-professional investors due to their volatility and opacity.  

In an update to its policy, the regulator reaffirmed its firm doctrinal stance explicitly stating: “cryptos are high-risk investments and will remain so under our regime”. The FCA did ease its position by opening access to certain exchange-traded notes (ETNs) for retail investors, but it has not yet softened its ban on derivatives.

This situation reveals the time lag between the unrestrained commercial activity of the platforms and the institutional response. The plaintiffs see this as retroactive recognition by the FCA of the danger posed by financial products offered by Binance as early as 2019. Thus, the core issue in this part of the case will be whether the absence of formal authorization at that time constitutes a clear violation of UK contract law and consumer protection, paving the way for systematic reimbursements.

European Tightening of MiCA and the Strategic Deadlock in Greece

This legal fragility in the British market coincides with other major setbacks for Changpeng Zhao’s exchange on the European continent, particularly regarding alignment with the Markets in Crypto-Assets (MiCA) regulation. The company formally withdrew its license application in Greece, a week after reports indicated that national authorities were about to issue a refusal. 

This strategic withdrawal comes at a critical time, as the MiCA transition period expires this Wednesday, July 1, 2026, permanently closing the window during which companies could operate under previous national regimes. Without this approval, platforms are no longer legally authorized to serve users within the European Union. Although Binance quickly communicated its intention to seek authorization from another EU member state, it has so far offered no indication regarding the targeted jurisdiction for this fallback.

The accumulation of these procedures, between the London class action and the de facto exclusion from the Greek market, outlines a complex future for centralized platforms backed by historically permissive business models. In the short term, the resolution of this $200 million lawsuit could create a formidable legal precedent, prompting trader collectives from other jurisdictions to seek redress for similar acts committed before waves of regulation.