About 1,700 British investors are reportedly suing binance and its founder Changpeng Zhao, they filed a High Court claim in London on June 30 seeking at least £150 million an equivalent to $200 million from the crypto exchange.
They alleged the exchange sold leveraged tokens, futures and options to UK retail customers without Financial Conduct Authority approval dating as far back as late 2019, two years before the FCA's outright ban took effect. Law firm KP Law says some claimants lost "life-changing" sums, with financial controller Tomas Sutas reportedly wiped out of over £100,000.
The legal law firm representing the majority of the investors focused on Section 26 of the Financial Services and Markets Act 2000, Under that provision, if an unauthorised firm arranged the agreements, a court can declare those agreements unenforceable. That’s a much stronger outcome than simply awarding damages. If the court agrees, Binance could be required to return investors’ original funds and potentially cover their losses too because the contracts may not have been legally valid under UK law in the first place.
And this isn't a first time legal battle for Binance as a near identical fight already played out in Ontario, where Canadian investors who bought the same type of derivatives between 2019 and 2022 filed a class action under Canadian securities law.
Binance argued the dispute should be settled through arbitration in Hong Kong, as required by its terms, but the Ontario Superior Court threw that argument out in 2024, calling the clause unconscionable and against public policy. As a result, the lawsuit was allowed to move forward. For the claimants in London, that decision offers a realistic example that courts may be willing to look beyond Binance’s standard contractual protections.
The timing couldn't be much worse for Binance.
The lawsuit arrived just as the UK's financial regulator wrapped up its long-awaited crypto rulebook, introducing a single licensing system for exchanges that starts from October 2027. And even companies that already have a presence in the UK won't be eased back in. They'll have to go through the licensing process all over again.
It also comes only days after Binance abandoned its attempt to secure a MiCA license in Greece instead of waiting for what many expected would be a rejection. With the EU's transition deadline passing on July 1, that move effectively shut the door on Binance's last remaining route into the European Union.
People on X picked up on the lawsuit almost immediately. The Financial Times and crypto outlet BSCN were among the first to report it, and the conversation quickly raised a now trending question: does the usual "buyer beware" argument still hold if the company selling the product wasn't even authorized to sell it in the first place? That angle has since become one of the biggest talking points among lawyers following the case.
Even if the investors eventually come out on top, though, that won't necessarily be the end of the story. Binance's corporate structure is spread across several jurisdictions, with defendants including Cayman Islands-based Binance Holdings, UAE-based Nest Exchange, and former CEO Changpeng "CZ" Zhao personally. Winning a judgment in a UK court is one thing. Actually enforcing it against companies and individuals based across different countries could be a much tougher battle.