One of the world's largest cryptocurrency exchanges is facing another major legal challenge. Around 1,700 investors from the United Kingdom have filed a class-action lawsuit in London's High Court against Bi.nance, its founder Changpeng Zhao (CZ), and several other entities associated with the operation of the platform.
According to available information, the investors are seeking at least £150 million in damages, equivalent to approximately $200 million.
Lawsuit Focuses on Crypto Derivatives Trading
The claim alleges that the platform offered high-risk cryptocurrency derivative products to UK customers without the necessary regulatory authorization.
The lawsuit primarily concerns futures contracts, options, and leveraged tokens—products that allow traders to use leverage. While leverage can significantly amplify potential gains, it can also magnify losses within a very short period.
According to the claim, the exchange made these products available to UK customers as early as late 2019, despite allegedly failing to comply with the UK's Financial Services and Markets Act (FSMA).
Law firm KP Law, which represents the investors, emphasized that the lawsuit does not concern losses from spot cryptocurrency trading. Instead, it focuses exclusively on losses resulting from trading crypto derivatives.
FCA Ban Plays a Key Role
A central element of the case is the decision made by the UK's Financial Conduct Authority (FCA).
On January 6, 2021, the FCA banned the sale, marketing, and distribution of cryptocurrency derivatives and exchange-traded crypto products to retail investors.
At the time, the regulator argued that these products posed excessive risks for retail customers due to extreme price volatility, valuation challenges, and the potential for rapid financial losses.
The plaintiffs now claim that the platform continued offering certain derivative products to UK users even after the FCA ban took effect.
The company later tightened access for British customers by introducing additional account verification requirements and enhanced customer checks.
Regulatory Pressure Continues to Grow
The London lawsuit comes as the company continues to face regulatory scrutiny in several other jurisdictions.
In Europe, the exchange is still working toward full compliance under the MiCA regulatory framework after encountering obstacles during previous licensing efforts.
Meanwhile, regulators worldwide are paying increasing attention to cryptocurrency derivatives and other leveraged investment products.
The company has also faced legal action in Australia, where regulators investigated whether certain retail clients had been properly classified before being granted access to higher-risk trading products.
A company spokesperson stated that the exchange remains committed to complying with applicable regulations and intends to vigorously defend itself against the lawsuit.
The outcome of the UK case could become an important precedent not only for the company itself but for the broader cryptocurrency industry. The court will ultimately determine to what extent investors can rely on existing financial laws to seek compensation for losses incurred while trading high-risk cryptocurrency products.
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