UK court has partly dismissed a lawsuit filed by a Bitcoin SV investor against Binance, narrowing the legal claims in the ongoing crypto-related case.
Judges in the UK dismissed an $11.9 billion claim by BSV investors, finding that they might have lessened their losses following the token’s delisting by Binance and others.
A lawsuit filed by Bitcoin SV investors against Binance and other major cryptocurrency exchanges for allegedly plotting to delist the token in 2019 was partially dismissed by the UK Court of Appeal.
The court decided in a May 21 ruling that investors who owned BSV during the delisting period (referred to as “sub-class B”) were not eligible for billions of dollars in speculative damages based on the fictitious development of BSV.
By claiming that Binance’s delisting denied holders the opportunity to benefit from BSV’s prospective ascent to a “top-tier cryptocurrency” like BTC ($111,369) or Bitcoin (BCH $431.07), these investors had demanded damages totaling more than 8.9 billion British pounds ($11.9 billion).
Citing the representative’s use of Bitcoin and Bitcoin Cash as comparators, the court dismissed this “foregone growth effect” claim, ruling that “BSV was not a unique cryptocurrency without reasonably similar substitutes.”
The main argument made by subclass B was that delisting resulted in a lost chance to profit from price growth. However, the court concluded that those investors had a good opportunity to lessen their losses by selling or reinvesting in other cryptocurrency assets.
Sir Geoffrey Vos, Master of the Rolls, wrote, “They had a duty to mitigate their losses.” “They cannot recoup losses that they could have reasonably prevented.”
The “loss of a chance” argument is rejected by the court.
Additionally, the appeal contested the tribunal’s use of the “market mitigation rule,” contending that such matters need to be decided at trial.
The court rejected that idea, ruling that damages must be calculated soon after the delisting and that the provision applies to freely trading assets like BSV.
The court also rejected another argument about the “loss of a chance” to profit from future price increases. The court declared the argument “flawed as a matter of principle” because cryptocurrencies are inherently volatile investments.
Even if some investors were unaware of the delisting, the court ruled that “they could never claim more than the total value of their holding before the delisting events plus any quantifiable consequential losses,” meaning that Binance’s limited strike-out application was eventually successful.
Binance wants the FTX lawsuit to be dropped.
On May 16, Binance moved to have a $1.76 billion lawsuit brought by the FTX estate dismissed, claiming that the allegations were illegal and an attempt to place blame for FTX’s demise elsewhere.
Citing Sam Bankman-Fried’s conviction on several fraud charges, the exchange claimed that internal fraud, not foreign manipulation, was the cause of FTX’s demise.
Binance has requested that all claims be dismissed with prejudice by the court. The response from the FTX estate has not yet been submitted.