Almost 1,700 British investors are suing Binance and its founder Changpeng Zhao for at least US$200 million, alleging that the world’s largest crypto exchange sold them risky derivative products without proper regulatory authorisation.
The lawsuit, filed in London’s High Court, targets Cayman Islands-registered Binance Holdings, UAE-registered Nest Exchange, Zhao (widely known as CZ) and “persons unknown” who allegedly operate the Binance trading platform.
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The claimants argue that Binance entities knowingly offered and promoted complex leveraged products to retail investors from late 2019, in breach of the UK’s Financial Services and Markets Act. Some investors say they lost tens of thousands of dollars after using products that could magnify both gains and losses.
Binance said it would defend itself against the claim. “Binance remains committed to its obligations to users and to operating in accordance with applicable law,” a spokesperson said, declining further comment on ongoing litigation.
UK case adds to Binance’s regulatory burden
The case comes against the backdrop of a tougher regulatory stance on crypto derivatives in the UK. The Financial Conduct Authority banned crypto firms from offering derivatives to retail customers in 2021, citing the products’ volatility, complexity and potential for consumer harm.
Binance later took steps to limit UK users’ access, including requiring additional checks. The claimants, however, allege that the company’s conduct before and around those restrictions caused significant losses.
The London lawsuit is notable not only because of the number of claimants, but also because it names Zhao personally. CZ stepped down as Binance CEO in 2023 after a sweeping US settlement, but he remains the most recognisable figure associated with the exchange.
Binance’s main licence is now in the United Arab Emirates, after efforts to secure a licence in Greece reportedly unravelled this month. The company has spent the past two years trying to move away from its earlier borderless operating model and rebuild itself as a regulated financial institution.
That shift has been neither smooth nor cheap.
CZ’s US legal history looms over the London claim
The UK lawsuit lands after several major US enforcement actions against Binance and Zhao.
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In November 2023, Binance agreed to pay more than US$4.3 billion to settle charges brought by the US Department of Justice and other agencies over anti-money-laundering failures, sanctions violations and operating as an unlicensed money transmitter. Zhao pleaded guilty to failing to maintain an effective anti-money-laundering programme, stepped down as CEO and agreed to pay a US$50 million fine.
In April 2024, a US federal judge sentenced Zhao to four months in prison. Prosecutors had sought a longer sentence, arguing that Binance had allowed illicit finance to flow through the platform. Zhao’s lawyers argued that he had accepted responsibility and that the company had since invested heavily in compliance.
Binance and Zhao also settled a case with the US Commodity Futures Trading Commission. The regulator had sued the exchange and its founder in 2023, alleging that Binance illegally offered derivatives to US customers and evaded compliance rules. Under the settlement, Binance was ordered to pay US$2.7 billion in disgorgement and penalties, while Zhao was ordered to pay US$150 million.
Separately, the US Securities and Exchange Commission sued Binance, Binance.US and Zhao in 2023, accusing them of operating unregistered exchanges, broker-dealers and clearing agencies, and of misleading investors. Binance has contested the SEC’s claims. A US court later allowed several of the regulator’s core allegations to proceed, while dismissing some others.
Beyond the US, Binance has faced regulatory and legal challenges in multiple markets. In Canada, a class action has alleged that the company sold crypto derivatives to retail investors without registration. In France, authorities have scrutinised Binance over alleged money-laundering and unauthorised digital-asset services. Not all of these proceedings name Zhao personally, but they form part of a broader global challenge to Binance’s earlier growth strategy.
Southeast Asia has seen similar regulatory pushback
The London case will be closely watched in Southeast Asia, where Binance has had a complicated history and crypto adoption remains among the highest in the world.
In Singapore, Binance withdrew its licence application and shut down Binance.sg in 2022 after the Monetary Authority of Singapore placed the global Binance.com platform on its investor alert list. Singapore has since tightened rules around retail crypto access, advertising and custody, while encouraging institutional blockchain activity under a more controlled framework.
In Malaysia, the Securities Commission ordered Binance to stop operating in 2021, saying the platform was running a digital asset exchange without authorisation. In Thailand, the Securities and Exchange Commission filed a criminal complaint against Binance in 2021 for allegedly operating without a licence. Binance later re-entered Thailand through Gulf Binance, a joint venture with Gulf Energy, which launched a regulated exchange in 2024.
The Philippines also moved against Binance, with regulators warning users and seeking to block access to the platform over licensing concerns. Indonesia, meanwhile, has allowed Binance exposure through Tokocrypto, a local exchange in which Binance has invested, but the market remains under close supervision as authorities shift crypto oversight from commodities regulators to the financial services regulator.
This patchwork reflects a broader regional dilemma. Southeast Asia is one of crypto’s most active retail markets, but regulators remain wary of speculative trading, offshore platforms and leveraged products.
Chainalysis has consistently ranked countries such as Vietnam, the Philippines, Indonesia and Thailand among the world’s leading markets for grassroots crypto adoption. Indonesia alone has more registered crypto investors than stock market investors, according to local regulatory data. Yet high adoption has also brought high exposure to scams, exchange failures and volatile products that many retail users do not fully understand.
Competition is moving towards compliance
Binance remains the largest crypto exchange globally by trading volume, but its legal troubles have created openings for rivals. Coinbase has positioned itself as a more regulated player, especially in the US and Europe. OKX, Bybit, Kraken, Crypto.com and Gemini are also competing aggressively across global markets, though several have faced their own regulatory constraints.
In Southeast Asia, the competitive landscape is increasingly localised. Coins.ph and PDAX operate in the Philippines, Independent Reserve and Coinhako are active in Singapore, while Indodax and Tokocrypto serve Indonesia. Some earlier regional players, such as Zipmex, struggled after the 2022 crypto credit crisis, underscoring the risks of weak governance and opaque exposure.
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The UK lawsuit reinforces the central question now facing global exchanges: whether rapid retail growth built on complex products can survive in markets where regulators are drawing clearer lines.
For Binance, the case is another test of whether its post-CZ compliance overhaul can contain legal fallout from its earlier era. For Southeast Asian regulators and users, it is a reminder that offshore platforms, high leverage and weak oversight can turn crypto’s promise of access into a costly risk.
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