Legal claims and regulatory setbacks raise questions about Binance’s new era of compliance and stability
Over 1,000 UK investors have filed a High Court claim against Binance, alleging the crypto exchange sold high-risk derivatives without authorisation between 2019 and 2020.
The group, comprising 1,692 British investors, claimed Binance offered leveraged crypto derivatives to retail users during the period in question without the permissions required under the UK’s Financial Services and Markets Act.
Claimants are seeking up to £150m in damages, arguing the instruments functioned like regulated financial products and left users exposed to losses, with some investors reportedly losing tens of thousands of pounds and others more than £1m.
KP Law, which is representing the investors, said the case demonstrates the risks retail users face when complex crypto products sit outside traditional financial safeguards.
Binance was forced to leave the UK market in October 2023 after its UK subsidiary was non-compliant with the Financial Conduct Authority’s (FCA) crypto marketing and promotions regulations to protect customers from ‘risky’ campaigns.
Notably, new UK crypto regulations are set to come into force in October 2027, following legislation passed in February 2026 that brought crypto assets into the FCA’s remit for the first time.
“Our clients are ordinary people, many of whom committed significant savings and who have suffered real financial harm,” said Hannah Sharp, Partner at KP Law.
“We are determined to hold Binance and its founder, Changpeng Zhao, to account. Cryptocurrency markets have, for too long, operated in a space where consumers have had limited recourse when things go wrong.”
A June to forget for Binance
Binance has not had an easy month, even by its own standards. The exchange faces pressure in Europe following the launch of the Markets in Crypto-Assets (MiCA) regime, which came into effect today (1 July) following the closing of the transitional deadline.
The company failed to secure a full MiCA licence after withdrawing its application from Greece’s Hellenic Capital Market Commission on 24 June, just days before the regulatory cut-off.
Binance stated that the decision followed a review of the status and timeline of the Greek authorisation process and that it would instead pursue approval in another EU member state.
Without MiCA authorisation in place, Binance is now required to scale back parts of its European offering to remain compliant with the new framework, with the firm warning that some users may see changes to their accounts and restrictions on certain services.
Binance said it is “working hard behind the scenes to engage closely with regulators and deliver the best possible path forward for our users”, adding that “all user funds remain safe and secure” and are held on a 1:1 basis.
The company also noted that affected users would receive communications about their options, including transfers and withdrawals where applicable.
What happened to the new era?
Binance has spent the past 12 months attempting to rebrand as a more structured, compliance-driven organisation.
The rebrand has coincided with changes across its leadership structure, including the departure of Chief Marketing Officer Rachel Conlan on 15 June, with former Trust Wallet CEO Eowyn Chen stepping in on an interim basis.
Chen previously led marketing and growth functions at Binance, where she played a role in expanding its ambassador and community ecosystem before moving to Trust Wallet.
Binance also named Co-founder Yi He as co-CEO alongside Richard Teng as part of a dual leadership structure last December.
These adjustments were intended to incite stability following 2023, when Binance and former CEO Changpeng Zhao pleaded guilty to US anti-money-laundering violations, resulting in a record $4.3bn (£3.25bn) settlement and a four-month prison sentence for Zhao.
It wouldn’t be fair to link the UK lawsuit to this new phase because the claims are about activity from 2019 and 2020, but its timing shows how the company’s past continues to cast a shadow over its efforts to change.
