Binance, CZ Face £150M Lawsuit From UK Crypto Investors Amid MiCA License Failure

Crypto exchange Binance and its co-founder Changpeng Zhao (CZ) are now hit by new regulatory and legal battles in Europe. The uncertainty comes following a legal action by a group of British investors for damages of up to £150 million (US$170.95 million). Moreover, Binance even withdrew its application for a Markets in Crypto-Assets (MiCA) license in Greece recently.

Binance, CZ Hit With Major Lawsuit In UK

According to the legal filing, 1,692 UK investors have brought a claim in the UK High Court against Binance. The legal action alleged that Binance launched leveraged crypto derivatives without permission under the UK’s Financial Services and Markets Act in 2019 and 2020 to retail investors.

Further, the claimants say they lost out financially from the sale of the products. This move has added to Binance’s word after it failed to attain a MiCA license despite the July 1 deadline passing.

Hannah Sharp, partner at KP Law, representing the investors, said, “Our clients are ordinary people, many of whom committed significant savings and who have suffered real financial harm. 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.”

Plaintiffs also claim that numerous investors “suffered substantial losses” as a result of the trading. It also claimed that investors lost “tens of thousands and in some cases millions of pounds.” One of the claimants, Tomas Sutas of London, reportedly lost over $100,000 through the exchange of Binance’s derivative products, per Financial Times report.

In response to the lawsuit, Binance said, “We do not comment on ongoing litigation. We will defend against these claims through the appropriate legal process in due course. Binance remains committed to its obligations to users and to operating in accordance with applicable law.”

The MiCA License Fiasco In Greece

The lawsuit is part of Binance’s European regulatory dilemma. The exchange announced that it pulled its MiCA application from Greece, and is now applying for a license in another EU member state.

In a statement, Binance explained, “We made this decision after careful consideration of the current status and timeline of the Greek process, with our users’ interests at the center.” The company added, “Our ambitions in Europe remain the same, and we are confident we will secure a license in the coming months.”

Binance also reiterated, “This means some users may be impacted, and we will communicate directly with affected users to provide clear information on next steps.” It added that Europe is one of the most important markets for them. Hence, they will continue to do business there under “a clear, fair, and harmonized MiCA framework.”

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