UK court of appeal dismisses bulk of a $13.3 billion class action against crypto exchange Binance

It follows the Court of Appeal of England and Wales’s dismissal (10 pages/190 KB) of the bulk of a $13.3 billion class action against crypto exchange Binance.

The Court of Appeal of England and Wales has dismissed the bulk of a $13.3 billion class action against crypto exchange Binance.

The case, which began in 2019 when several major cryptocurrency exchanges colluded to delist Bitcoin Satoshi Vision (BSV), has been closely watched by the legal community. The claimants, who include both immediate and indirect investors in BSV, argued that the delisting breached article 101 of the Treaty on the Functioning of the European Union and/or the UK Competition Act 1998.

The lower court, the Competition Appeal Tribunal (CAT), declined to strike out the claims entirely but narrowed its scope. The sub-classes appealed to the Court of Appeal, arguing that the CAT was wrong to find that the market mitigation rule applied to all the claims.

The upper court dismissed the majority of the appeal, ruling that the damages claimed were speculative and unsupported. The court also found that BSV was tradeable and substitutable, and the investors therefore had a duty to mitigate losses by selling in an open market.

The Court of Appeal rejected the foregone growth argument, stating that the claim that BSV could have grown in value like bitcoin was speculative and not legally recoverable. The loss of chance argument was also rejected because the claim did not depend on third-party decisions but on speculative market growth.

Finally, the Court of Appeal found that, in terms of awareness of delisting, only those unaware of the delisting might have a claim beyond immediate loss. This means that sub-class B holders can only claim immediate loss, for instance £55 to £39 – not speculative future gains.

Jennifer Craven, litigation expert at Pinsent Masons, said: “The court’s confirmation that the market mitigation rules should apply to readily tradeable digital assets should now limit exchanges’ exposure to massive speculative liability claims following the delisting decision.”

While the scope of the case was significantly narrowed, smaller claims from investors who lost access or sold currency at a loss may still proceed.