Binance Scores Partial Victory in Bitcoin SV Delisting Lawsuit
In a significant legal development for the cryptocurrency industry, the United Kingdom’s Court of Appeal has partially dismissed a lawsuit filed by Bitcoin SV (BSV) investors against major crypto exchanges, including Binance, for allegedly conspiring to delist the token in 2019.
The lawsuit, originally filed in 2020, argued that Binance‘s delisting of BSV deprived holders of the opportunity to profit from its potential rise to a “top-tier cryptocurrency” like Bitcoin (BTC) or Bitcoin Cash (BCH). Investors claimed over 8.9 billion British pounds ($11.9 billion) in damages, alleging a “foregone growth effect” caused by the delisting.
Court Rejects Speculative Damages
However, the court ruled against this claim, stating that BSV was not a unique cryptocurrency without reasonably similar substitutes. The court highlighted the investors’ own use of Bitcoin and Bitcoin Cash as comparators, further supporting their argument that BSV was not inherently unique.
The court also rejected the investors’ claim that they had missed an opportunity to benefit from price appreciation, emphasizing that they had ample chance to mitigate their losses by selling or reinvesting in other crypto assets. The ruling stated that investors have a “duty to mitigate their losses” and cannot recover losses that could have been reasonably avoided.
Impact on Future Cryptocurrency Delisting Cases
This ruling could set a precedent for future cases involving cryptocurrency delistings, particularly in the UK. It reinforces the principle that investors are responsible for mitigating losses in volatile markets, which are inherent to the cryptocurrency landscape.
The court’s decision to dismiss the “loss of a chance” argument highlights the inherent volatility of cryptocurrencies. The ruling emphasizes that future price gains are uncertain and cannot be reliably predicted, making it challenging to establish a claim based on missed opportunities in such a dynamic market.
While the court’s decision represents a partial victory for Binance, it is important to note that the lawsuit is not entirely dismissed. The court has yet to rule on other aspects of the case, including claims brought by investors who held BSV before the delisting period.
This case further emphasizes the legal complexities surrounding cryptocurrency delistings and the need for clear regulatory frameworks to address such issues. As the cryptocurrency market continues to evolve, legal precedents like this will play a crucial role in shaping future industry practices and investor protections.
