The Court of Appeal in the United Kingdom has partially rejected a lawsuit initiated by Bitcoin SV investors against prominent cryptocurrency exchanges, such as Binance, for purportedly conspiring to remove the token from their platforms in 2019.
In a verdict delivered on May 21, the court decided that investors who possessed BSV throughout the period of its delisting (designated as “sub-class B”) were not entitled to billions in speculative compensation based on BSV’s projected growth.
These investors had sought more than 8.9 billion British pounds ($11.9 billion) in compensation, claiming that Binance’s delisting robbed holders of the opportunity to gain from BSV’s potential ascent to a “top-tier cryptocurrency” like Bitcoin (BTC) or Bitcoin Cash (BCH).
The court dismissed this “missed growth effect” argument, asserting, “BSV was clearly not a one-of-a-kind cryptocurrency without reasonably comparable alternatives,” referencing the representative’s own use of Bitcoin and Bitcoin Cash as benchmarks.
Sub-class B’s primary assertion was that delisting resulted in a lost opportunity to benefit from price surges. However, the court concluded that those investors had sufficient chances to alleviate losses by either selling or reinvesting in different crypto assets.
“They bore the responsibility to mitigate their losses,” wrote Master of the Rolls Sir Geoffrey Vos. “They are not entitled to recover losses that they could have reasonably mitigated.”
Related: Bitcoin SV investors strive to revive 2019 Binance lawsuit
Court rejects “loss of a chance” contention
The appeal also contested the Tribunal’s implementation of the “market mitigation rule,” suggesting that such matters should be reserved for trial.
The court declined this viewpoint, asserting that the rule distinctly applies to assets like BSV that are traded freely, and that damages need to be assessed shortly following the delisting.
Another argument concerning the “loss of a chance” to benefit from future price increases was also denied. The court determined it was “flawed as a principle,” noting that “cryptocurrencies are inherently volatile investments.”
Binance’s limited strike-out application was ultimately successful, with the court indicating that even if some holders were unaware of the delisting, “they could never claim more than the total worth of their holding prior to the delisting events plus any measurable consequential losses.”
Related: Binance seeks arbitration for all participants in securities class action
Binance aims to dismiss FTX lawsuit
On May 16, Binance submitted a motion to dismiss a $1.76 billion lawsuit filed by the FTX estate, contending that the allegations are legally misguided and an attempt to shift blame for FTX’s downfall.
The exchange asserted that FTX’s failure was due to internal fraud, not external manipulation, citing Sam Bankman-Fried’s conviction on multiple fraud offenses.
Binance has requested the court to dismiss all claims with prejudice. The FTX estate has not yet responded.
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