Crypto Exchanges Win UK Court Victory Over $11.9 Billion Lawsuit

Binance and several other crypto exchanges have secured a significant legal victory in the UK Court of Appeal, which partially dismissed an $11.9 billion lawsuit related to the delisting of Bitcoin SV (BSV). The court ruled on May 21 that investors could not claim damages for hypothetical profits they might have earned had the token remained listed on the exchanges.

The lawsuit originated from a 2019 decision by Binance, Kraken, ShapeShift, and Bittylicious to delist BSV, a Bitcoin fork associated with entrepreneur Craig Wright. Investors behind the lawsuit contended that the delistings unfairly prevented BSV from gaining value and deprived them of potential returns. They alleged that the exchanges acted anti-competitively and that BSV’s price would have increased significantly if it had remained accessible on major trading platforms.

The UK Court of Appeal rejected these arguments, stating that investors were not legally entitled to any particular market performance from the cryptocurrency. Sir Geoffrey Vos, who authored the judgment, noted that BSV was not “a unique crypto without reasonably similar substitutes.” The court held that other digital assets could have served as alternatives, and investors should have adjusted their positions accordingly. “They had a duty to mitigate their losses,” Vos wrote, emphasizing that market participants must respond proactively to protect their investments.

A key part of the lawsuit was the claim of “loss of a chance,” the supposed opportunity to profit from future BSV gains had it not been delisted. The court rejected this as speculative, noting that cryptocurrency investments are inherently volatile. “Cryptos are, by nature, volatile investments,” the court ruled, stating that it would not award compensation based on imagined profits. Only verifiable losses could be considered for compensation. This ruling sends a clear message: courts will not entertain lawsuits based on missed opportunities or unproven financial projections in the crypto space.

The decision marks a significant legal victory for Binance and the other exchanges involved. While the lawsuit was only partially dismissed, the court’s rejection of the central claims undermines the bulk of the plaintiffs’ case. Notably, the ruling clarifies that crypto exchanges are not obligated to keep every token listed, nor are they responsible for the market effects of delisting decisions unless direct harm can be proven. Even if investors were unaware of the delisting events at the time, the court ruled their claims would be limited to the token’s value before delisting plus any directly quantifiable losses, not potential future profits.

For Binance, the timing of this ruling is strategic. The company is also attempting to dismiss a separate $1.76 billion claim brought by the FTX estate. In that case, Binance argues that the FTX collapse was due to internal mismanagement and fraud, not any action by Binance. With the UK Court’s reasoning in its favor, Binance may add momentum to its broader legal defense strategy. This verdict may shape future legal cases in crypto delistings, setting a precedent for how courts view the responsibilities of exchanges and the rights of investors in the volatile world of cryptocurrency.