Bitcoin SV (BSV) investors are seeking justice in the UK Court of Appeal after Binance’s delisting of BSV in April 2019 allegedly caused them to miss out on substantial growth in the value of their holdings.
In July 2024, the Competition Appeal Tribunal dismissed a portion of the group’s complaint that claimed Binance’s delisting hindered BSV from becoming a top-tier cryptocurrency, resulting in a loss of potential growth. This claim could potentially lead to a significant financial penalty against Binance, exceeding $13 billion, based on the assumption that BSV would have reached the value of Bitcoin by July 2022.
During the recent Court of Appeal session, the group’s legal representatives argued that the “loss of chance” claim should be included in the trial, as the delisting has led to a permanent ongoing loss of value for BSV holders. John Wardell KC emphasized that the damage caused by the delisting continues to impact investors to this day.
While the Competition Appeal Tribunal did not dismiss the case entirely in its pre-trial judgment, it did recognize the “market mitigation rule” in relation to the delisting. This rule suggests that most BSV holders were aware of the delisting and had the opportunity to trade their holdings for alternative cryptocurrencies.
However, the lawyers representing the BSV investors contested the application of the market mitigation rule, arguing that investors were not able to avoid losses by trading into other cryptocurrencies. They emphasized that there is no duty to mitigate if the damaged asset cannot generate sufficient funds for mitigation.
On the other hand, Binance’s legal team, led by Brian Kennelly KC, refuted this argument, stating that BSV could have been easily exchanged for Bitcoin or other cryptocurrencies, as BSV was a readily marketable asset at the time of delisting.
The case against Binance is part of a larger class action involving Kraken, ShapeShift, and Bittylicious, all of which delisted BSV between April and June 2019. The claims were filed by BSV Claims Limited, representing UK-based BSV holders between April 2019 and July 2022, estimated to be around 243,000 investors.
This case marks the UK’s first collective legal action involving cryptocurrencies and competition, with the complainant alleging that the exchanges conspired to delist BSV. The legal proceedings have been described as “novel” and have a unique backstory, including allegations against Dr. Craig Wright, who was found by the English High Court to have orchestrated a fraud related to BSV.
While the outcome of the case remains uncertain, legal experts like Ashley Fairbrother from Edmonds Marshall McMahon note that successful claims against exchanges pose significant challenges. Despite the resources available to BSV investors, the complexity of the case and the implications for Craig Wright’s fraudulent claims make the ultimate outcome difficult to predict.
In conclusion, the legal battle between BSV investors and the exchanges delisting BSV highlights the complexities and challenges of seeking justice in the cryptocurrency space. The outcome of the case will have far-reaching implications for investor protection and regulatory frameworks within the industry.
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