Binance scores legal victory as UK court partially dismisses Bitcoin SV lawsuit
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Binance scores legal victory as UK court partially dismisses Bitcoin SV lawsuit
UK judges have dismissed an $11.9 billion claim from BSV investors, ruling they could have mitigated losses after Binance and other companies delisted the token.
The UK Court of Appeal has partially dismissed a lawsuit filed by Bitcoin SV investors against major cryptocurrency exchanges, including Binance, accusing them of conspiring to delist the token in 2019.
In a ruling issued on May 21, the court ruled that investors who held BSV shares during its delisting period (classified as “Subclass B”) are not entitled to billions of dollars in speculative compensation based on BSV’s hypothetical growth.
These investors are seeking compensation of more than £8.9 billion ($11.9 billion), claiming that Binance's delisting deprived its holders of the opportunity to benefit from BSV's potential rise to a "top-tier cryptocurrency" like Bitcoin.
Bitcoin
$111,439
or Bitcoin Cash
Bitcoin Cash
$437.17
.
The court rejected this “lost growth effect” theory, stating that “BSV was clearly not a unique cryptocurrency with no reasonably similar alternatives,” pointing to the actor’s use of Bitcoin and Bitcoin Cash as comparisons.
The primary claim of Subclass B was that the delisting resulted in a missed opportunity to benefit from price appreciation. However, the court held that these investors had ample opportunity to mitigate losses by selling or reinvesting in other digital assets.
"It was their duty to mitigate their losses," wrote the arbitrators' chairman, Sir Geoffrey Vos. "They cannot recover losses they could reasonably have mitigated."
UK court rules against Bitcoin SV investor's lawsuit. Source: Case Law
Related: Bitcoin SV Investors Try to Revive 2019 Binance Lawsuit
Court rejects "lost opportunity" argument
The appeal also challenged the court's application of the "market mitigation" rule, arguing that such cases should be left to trial.
The court rejected this idea, noting that the rule clearly applies to freely tradable assets like BSV, and that damages should be assessed shortly after the delisting.
An additional argument related to the "lost opportunity" to benefit from future price gains was also rejected. The court ruled this argument "fundamentally flawed," noting that "cryptocurrencies, by their very nature, are volatile investments."
Ultimately, Binance's limited delisting request was successful, with the court stating that even if some shareholders were unaware of its delisting, "they will never be able to claim more than the total value of their holdings prior to the delisting events plus any subsequent measurable losses."
Related: Binance Seeks Arbitration for All Securities Class Action Lawsuit Members
Binance seeks to dismiss FTX lawsuit
On May 16, Binance filed a motion to dismiss a $1.76 billion lawsuit filed by FTX, arguing that the claims are legally flawed and an attempt to shift responsibility for FTX's collapse.
The exchange stated that FTX's downfall stemmed from internal fraud, not external manipulation, citing Sam Bankman-Fried's conviction on multiple fraud charges.
Binance has asked the court to dismiss all claims subject to the provisions. FTX has not yet filed its response.
