Quick Summary:
- The UK Court of Appeal partially dismissed an $11.9 billion class-action lawsuit against Binance, Kraken, ShapeShift, and Bittylicious.
- The lawsuit claimed the exchanges harmed investors by delisting Bitcoin SV (BSV) in 2019, blocking its potential growth.
- The court ruled investors had a duty to mitigate losses by shifting to other similar cryptocurrencies.
- “Loss of a chance” claims for potential future profits were rejected due to crypto’s volatile nature.
- This ruling sets a precedent benefiting exchanges in future crypto-related litigation.
- Binance now gains momentum amid ongoing legal battles, including a separate $1.76 billion suit from the FTX estate.
A Six-Year Crypto Legal Battle
The saga began in 2019 when major crypto exchanges — Binance, Kraken, ShapeShift, and Bittylicious — decided to delist Bitcoin SV (BSV), a Bitcoin fork linked to the controversial figure Craig Wright. Investors argued this decision cut off BSV’s “moonshot” potential, leading to massive losses.
However, the UK Court of Appeal wasn’t convinced.
“BSV was obviously not a unique cryptocurrency without reasonably similar substitutes,” explained Sir Geoffrey Vos, Master of the Rolls. This means investors always had alternatives to pivot towards, weakening the claim that the exchanges robbed them of a unique opportunity.
Investors Must Act — Not Wait
A key takeaway from the ruling is that investors have a duty to protect their own interests.
Sir Geoffrey Vos emphasized,
“They had a duty to mitigate their losses. They cannot recover losses that they could reasonably have mitigated.”
In other words, if investors foresaw BSV’s decline after delisting, they should have moved their funds to other assets. Courts expect crypto investors to be proactive, not sit idle hoping for a rebound.
No Compensation for Hypothetical Gains
The lawsuit’s central argument rested on the “loss of a chance” — the potential future profits investors missed if BSV had stayed listed.
The court decisively rejected this:
“Cryptos are, by their nature, volatile investments,” the ruling stated. Compensation can only be awarded for actual, proven losses — not for hypothetical or imagined gains.
This is a clear message to the crypto community: courts won’t pay for missed chances in the unpredictable crypto market.
What This Means for Exchanges and Investors
This ruling is a major win for Binance and other exchanges, providing a strong legal shield against future claims based on delisting decisions.
Even if investors were unaware of the delisting at the time, their claims are limited strictly to measurable losses at the moment before delisting.
This UK precedent will likely influence how similar crypto lawsuits are handled worldwide.
Binance’s Legal Fortitude Grows
This victory comes at a crucial time for Binance, which is also fighting a $1.76 billion lawsuit filed by the FTX estate. Binance maintains that the FTX collapse stemmed from FTX’s own internal fraud, distancing itself from liability.
With the UK court ruling behind them, Binance is entering these ongoing battles from a position of strength.
In brief: The UK Court of Appeal’s ruling sends a clear message — crypto investors must act responsibly, and exchanges are not liable for lost potential in volatile markets. This sets the stage for more balanced, realistic crypto litigation going forward.