Bitcoin SV investors are seeking to revive a legal battle against Binance over its decision to delist the token in 2019. The investors argue that Binance’s actions severely impacted the value of their Bitcoin SV holdings, resulting in significant financial losses. The case, which initially faced setbacks, is now gaining new momentum as new revelations come to light.
Bitcoin SV, a controversial offshoot of Bitcoin Cash, was delisted from Binance in 2019. The delisting was part of a broader trend in which several major exchanges removed the token. Investors claim that this action stunted the token’s growth, preventing it from reaching its full potential as a top-tier cryptocurrency. As a result, they have filed an appeal to the United Kingdom’s Court of Appeal, hoping to revive their lawsuit, which was previously dismissed by the Competition Appeal Tribunal in 2024.
At the heart of the case is the argument that the delisting caused a “forgone growth effect,” essentially halting Bitcoin SV’s potential to grow in line with other leading cryptocurrencies like Bitcoin. The investors contend that had Binance allowed the token to remain on its platform, Bitcoin SV could have experienced similar growth to Bitcoin, which reached new all-time highs by July 2022. The total penalty Binance could face, if the lawsuit is successful, could exceed $13 million, a substantial sum that would reflect the hypothetical growth Bitcoin SV may have achieved if it had been allowed to remain listed.
John Wardell KC, the lead lawyer representing the Bitcoin SV investors, argued before the Court of Appeal that the delisting caused lasting damage. He emphasized that the loss of value has continued to affect the investors, as the token was unable to grow and develop into a more prominent asset in the crypto market. “Because of the delisting, there has been damage which continues to this day,” Wardell stated.
While the Tribunal’s ruling in 2024 acknowledged the investors’ claims to some extent, it ultimately decided that the “market mitigation rule” applied to the delisting. This rule posited that most Bitcoin SV holders would have been aware of the impending delisting and had ample time to exchange their holdings for other assets. However, the investors are challenging this conclusion, asserting that many of them could not avoid the loss simply by trading into other cryptocurrencies.
Binance’s legal representatives, led by Brian Kennelly KC, have strongly contested the investors’ claims. Kennelly pointed out that Bitcoin SV was a marketable asset, and holders could have exchanged it for other cryptocurrencies, including Bitcoin. The exchange’s defense rests on the argument that there was sufficient market information available for Bitcoin SV holders to act before the delisting, thus reducing the likelihood of significant losses.
The case is not limited to Binance; it is part of a broader class action lawsuit involving other exchanges such as Kraken, Bittylicious, and ShapeShift, all of which delisted Bitcoin SV between April and June 2019. The legal team behind the suit represents Bitcoin SV holders in the UK, and the total number of affected investors is estimated to be around 243,000.
Adding another layer to the complexity of the case is the involvement of Craig Wright, a controversial figure in the crypto world who has claimed to be Bitcoin’s mysterious creator, Satoshi Nakamoto. According to the investors’ legal team, Wright used his false claims of being Satoshi to manipulate investment in Bitcoin SV. The English High Court recently ruled that Wright was not Satoshi and that he had orchestrated a fraud that misled both investors and various courts globally. This ruling adds significant weight to the investors’ argument that Wright’s influence contributed to the token’s diminished value.
Ashley Fairbrother, a partner at Edmonds Marshall McMahon, highlighted the novel nature of the case, which could set a significant legal precedent. He also noted the unusual backstory of the lawsuit, especially with the court’s ruling against Wright’s claims of being Satoshi, further complicating the situation.
As the appeal progresses, the outcome of the case could have wide-ranging implications, not just for Binance, but also for the broader cryptocurrency market, especially in terms of how exchanges manage the delisting of tokens. If the investors succeed, it could set a precedent for how other crypto users and investors might hold exchanges accountable for actions that affect their investments.
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