Nikolas Sargeant
The plaintiffs, seeking $9 billion in damages for missed opportunities, highlight the legal complexities and significant financial stakes within the crypto industry.
Hearing of Major Crypto Exchanges Over BSV Delisting
On June 5, the UK Competition Appeal Tribunal started a hearing against six exchanges that delisted Bitcoin SV in 2019. The defendants include Binance Europe Services, ShapeShift (founded by Erik Voorhees), Kraken (under Payward), Bittylicious, and related entities.
Each defendant has a legal team, resulting in extensive documentation and many lawyers involved. The tribunal estimates that the collective proceedings order (CPO) will take three days.
Bitcoin SV (BSV), short for "Satoshi's Vision," is a blockchain and cryptocurrency that split from Bitcoin Cash (BCH) in 2018. It was developed by a firm associated with Craig Wright, who controversially claims to be Bitcoin's anonymous creator, Satoshi Nakamoto.
The split and subsequent delisting stemmed from a community divide, with various firms and prominent figures supporting different narratives and forks.
In April 2019, a wave of BSV delistings occurred, including from major exchanges like Binance and Kraken. These delistings were controversial and largely unexplained at the time. Kraken cited BSV’s behavior as "completely antithetical" to its values and even conducted a poll suggesting BSV was "toxic." Binance provided minimal reasoning, stating that BSV no longer met its standards.
In 2022, BSV Claims initiated a $12 billion class action lawsuit in the UK against Binance, Kraken, and others. The plaintiffs argue that BSV holders missed substantial growth opportunities due to the delistings, estimating that $9 billion in compensation is owed.
A Similar Lawsuit Filed Last Year
Last year, the American law firm Roche Freedman initiated a similar class action lawsuit against major crypto exchanges and token issuers, including Binance, KuCoin, and BitMEX, accusing them of selling unlicensed securities and manipulating the market.
The lawsuits also target BiBox, the Tron Foundation, Block.one, Quantstamp, KayDex, Civic, BProtocol, and Status, as well as notable figures like Binance CEO Changpeng Zhao, who is currently serving a sentence in a California prison, and EOS and Block.one’s Dan Larimer and Brendan Blumer. The firm alleges that these exchanges manipulated prices to force liquidations and betrayed public trust, resulting in substantial profits.
Roche Freedman, known for its involvement in cryptocurrency litigation, including representing the estate of Dave Kleiman against Craig Wright, asserts that the lawsuits contain evidence of misconduct that generated billions in illicit profits.
Blum, COO of Two Prime, mentioned that these lawsuits could set legal precedents on what constitutes a securities offering and the jurisdictional responsibilities. However, some companies opted for out-of-court settlements, and enforcing decisions on international entities like Tron or KuCoin proved challenging.
This current development marks a critical phase in the long-standing dispute between regulators and crypto companies, with significant financial claims resulting from the delistings.
