Cryptocurrency: £10bn claim

The Competition Appeal Tribunal (CAT) has made an overseas funder’s compliance with key parts of the Association of Litigation Funders’ code of conduct a condition of granting a collective proceedings order.

A collective proceedings order has been granted by the Competition Appeal Tribunal (CAT) in a £10bn cryptocurrency class action claim against four exchanges.

The Competition Appeal Tribunal (CAT) has made an overseas funder’s compliance with key parts of the Association of Litigation Funders’ code of conduct a condition of granting a collective proceedings order.

Softwhale Holdings is funding UK litigation for the first time and is not a member of the association.

But it said from an early stage that it would voluntarily comply with the code’s requirements in relation to capital adequacy and case funding and the CAT has stitched this into the fabric of the BSV claim in a ruling late last month.

The CAT said it would grant the order once receiving the undertaking, “subject to any points which would cause us to reconsider”.

The claim alleges that four leading cryptocurrency exchanges – Binance, Bittylicious, Kraken and Shapeshift – colluded to delist cryptocurrency Bitcoin Satoshi Vision (BSV) in 2019.

It is estimated that more than 240,000 investors in the UK suffered losses of around £10bn.

The class representative is Lord Currie, chief executive of BSV Claims and a former chair of the Competition & Markets Authority, while former Lord Chancellor Robert Buckland KC is on the advisory board. London disputes law firm Veltior Law is acting for Lord Currie.

Softwhale Ventures is part of the Ayre Group, owned by Canadian online gambling billionaire Calvin Ayre, who is also active in bitcoin and blockchain.

The CAT ruling said that, while there was “extensive correspondence” from the proposed defendants taking points of objection to the funding arrangements, they did not pursue them at the hearing.

The original litigation funding agreement was entered into in July 2022 and had to be redrawn following last year’s Supreme Court ruling in PACCAR. It provides up to £18.6m of funding, with Softwhale’s fee calculated by reference to a multiple of the total funding commitment, which the CAT had confirmed did not fall foul of PACCAR.

Softwhale’s performance of the agreement is guaranteed by Mt Burgos Holdings Ltd, up to more than £9.8m.

The CAT recorded that there was also after-the-event insurance in place, providing cover of £2m up to certification and £14m post-certification. The policy includes an anti-avoidance endorsement.

If the policy proves insufficient to cover any adverse costs order, a deposit of £5m cash is held in the claim trust account, and the funding agreement includes an undertaking to ensure that the account is maintained at a minimum level of £5m.