Binance and its founder Changpeng Zhao face a UK lawsuit seeking nearly $200 million (£150 million) over allegations that the exchange offered complex and risky financial products, such as leveraged trading, without regulatory approval. Nearly 1,700 British investors are listed as claimants, some of whom lost tens of thousands of dollars when these offerings were available in late 2019. Binance stated it would defend itself against the suit. The UK Financial Conduct Authority (FCA) banned crypto derivatives for retail customers in October 2020, effective January 2021, deeming them unsuitable for retail investors. The FCA recently lifted the ban on retail access to exchange traded notes (ETNs) but continues reviewing derivatives. Separately, Binance withdrew its MiCA application in Greece, a step that would have allowed EU-wide operations from July 1, and plans to reapply via another EU member state.

Key facts

• Binance and CZ sued in UK for nearly $200 million over unapproved derivatives.
• Nearly 1,700 British investors are claimants, with some losing tens of thousands.
• The FCA banned crypto derivatives for retail customers in 2020, effective 2021.
• Binance withdrew its MiCA application in Greece and will reapply elsewhere.
• The FCA recently lifted a ban on retail access to crypto ETNs but not derivatives.

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