Binance scores legal win as UK court partially dismisses Bitcoin SV lawsuit

The UK Court of Appeal delivered a significant blow to Bitcoin SV (BSV) investors in their lawsuit against major crypto exchanges, including Binance, over the 2019 delisting of BSV. The court’s May 21st ruling rejected the investors’ claim for billions in speculative damages based on BSV’s potential future growth. This “foregone growth effect” argument, seeking over £8.9 billion in damages, was deemed invalid. The court highlighted the volatility inherent in cryptocurrencies and the availability of alternative assets, emphasizing that investors had a duty to mitigate their losses by selling or reinvesting. The judges rejected the idea that BSV was a unique asset without comparable substitutes, citing the investors’ own use of Bitcoin and Bitcoin Cash as examples.

The court also dismissed the investors’ appeal against the application of the “market mitigation rule,” confirming its applicability to freely tradable assets like BSV and specifying that damages should be calculated shortly after the delisting event. Furthermore, the “loss of a chance” argument, based on the potential for future price appreciation, was also rejected as fundamentally flawed. The court emphasized that the speculative nature of cryptocurrency investments makes such claims untenable.

Even considering investors who were unaware of the delisting, the court ruled that their claims could not exceed the total value of their holdings before the delisting, plus any quantifiable consequential losses. This effectively limits the potential recovery for any remaining claimants.

Separately, Binance is actively pursuing legal strategies to defend against other lawsuits. On May 16th, they filed a motion to dismiss a $1.76 billion lawsuit brought by the FTX estate, asserting that FTX’s collapse resulted from internal fraud, not external manipulation, citing Sam Bankman-Fried’s fraud conviction. Binance seeks to have all claims dismissed with prejudice. The FTX estate is yet to respond. These legal battles highlight the ongoing complexities and challenges within the cryptocurrency regulatory landscape.