- UK court ruled BSV investors failed to mitigate losses after Binance’s 2019 delisting.
- Judges rejected BSV’s $13.3B claim saying projected BSV growth vs. BTC was speculative.
- Smaller BSV claims may proceed only for actual losses, not hypothetical gains.
The Court of Appeal in the UK dismissed most of the $13.3 billion class action filed by Bitcoin SV (BSV) investors against Binance. The lawsuit filed by BSV Claims Limited claimed that Binance and other major exchanges were involved in an illegal agreement to delist BSV from their exchanges in 2019, which allegedly held back its potential growth and market value. However, in its May 21 ruling, the court sided with Binance, stating that the damages claimed by BSV investors were speculative and unsupported by legal principles.
The panel of judges found that the so-called “foregone growth effect” theory suggesting BSV would have reached price levels comparable to Bitcoin or Bitcoin Cash, could not stand. According to the ruling, investing in BSV as a tradable asset allowed investors to mitigate their losses after it was removed from exchanges. The prosecuting team showed that BSV investors viewed Bitcoin and Bitcoin Cash as alternatives weakening the claim that BSV was irreplaceable or unique.
Sir Geoffrey Vos, Master of the Rolls, wrote, “They cannot recover losses that they could reasonably have mitigated.” He added that the law required claimants to take reasonable steps to reduce their losses when the asset remained tradable on other platforms.
Market Mitigation Rule Upholds Binance’s Position
The court approved the “market mitigation rule,” which makes investors responsible for acting prudently in the open market. If you had BSV at its delisting, designated as “sub-class B”, the judgment meant you had to sell or swap it for other cryptocurrencies to avoid further losses. Based on hypothetical price growth, the court ruled that measuring damages must be done shortly after the delisting, not years later.
The appeal discussed the “loss of a chance” argument, where some claimed they would have potential gains if BSV hadn’t been delisted. The judges deemed this opinion incorrect, pointing out that cryptocurrencies’ volatility and the uncertainty of future market movements made such damages impossible to quantify. The court added that the damages should be based on facts instead of speculative scenarios.
As a result, the court limited the lawsuit’s scope and eliminated most of the class action’s demands for financial loss. As a result, Binance and other exchanges in similar cases, such as Kraken and ShapeShift, face less risk of legal responsibility.
Smaller Investor Claims Remain After Court’s Partial Dismissal
The court ruled that most of the $13.3 billion claim amount should be rejected, but parts of the lawsuit can still be pursued. These claims are from investors who could not access their BSV after it was delisted or sold their holdings despite suffering a loss. The court stressed that any compensation awarded in these cases would be limited to the actual value lost, not speculative future gains.
The BSV Investors lawsuit is among several high-profile cases facing Binance in global jurisdictions. In a separate legal matter, Binance recently filed a motion to dismiss a $1.76 billion lawsuit from the FTX estate, arguing that internal fraud at FTX caused its collapse.
As the court states, investors must actively manage their holdings, especially when assets remain tradable. It also clarifies that the courts are not ready to pay damages based on speculative price projections or uncertain future events.
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