Nearly 1,700 British investors sued Binance and founder Changpeng Zhao in London’s High Court on June 30, seeking at least 150 million pounds (US$199 million) over allegations that the crypto exchange sold and promoted complex crypto derivatives to retail customers without regulatory authorization from late 2019.

The case names Cayman Islands-registered Binance Holdings, United Arab Emirates (UAE)-registered Nest Exchange, Zhao, and “persons unknown” alleged to operate the Binance trading platform.

Some claimants said they lost tens of thousands of pounds on leveraged products, which can magnify gains and losses.

The UK’s Financial Conduct Authority banned the sale, marketing, and distribution of crypto derivatives to retail consumers from Jan. 6, 2021, by firms acting in or from the UK.

The regulator said retail consumers could not reliably value such products because of volatility and financial crime risks.

In consultation, it estimated the ban could deliver annual consumer benefits of 75 million pounds (US$99.3 million) to 234.3 million pounds (US$310 million).

Binance said it would defend the lawsuit but declined further comment on the ongoing litigation.

🔗 Source: Reuters