£250m lawsuit against crypto firm Binance grows with 1000 new investors

A group legal claim against crypto trading platform Binance and its founder, Changpeng Zhao, has grown to include 1,000 new UK-based retail investors, bringing the total number of claimants to approximately 2,700. The case, filed in the High Court in England and Wales in June, alleges that Binance sold high-risk, complex derivative products without the necessary regulatory authorisation from the Financial Conduct Authority (FCA). KP Law, representing the claimants, expects the total claim value to exceed £250 million.

The derivative products in question are complex financial contracts used by professionals to hedge against risk or engage in market speculation. However, the claimants argue that these products, which involve higher levels of risk and reward based on cryptocurrency movements and often use leverage, were not suitable for retail investors.

The products were allegedly made available to Binance's UK users from late 2019 to early 2020, with the platform promoting them through various channels, including social media and email communications.

Investors with the group claim have suffered substantial losses, losing tens of thousands and in some cases millions of pounds. Many claimants, who are not financial professionals, suffer significant mental strain due to the impact on their lives. Binance has stated that it will defend against the claims through the appropriate legal process. The FCA is expected to open its authorisation gateway for the UK's new crypto asset regime on September 30. Changpeng Zhao was not immediately available for comment.