BSV Claims v Bittylicious and others

The underlying claim is by the proposed class representative (PCR) of the UK-based holders of the cryptocurrency Bitcoin Satoshi Vision (BSV), which was delisted by the defendant cryptocurrency exchanges between April and June 2019. The most significant part of the PCR’s claim by quantum is for the so-called “Forgone Growth Effect”, seeking damages of up to £9 billion for the loss allegedly suffered by BSV having been prevented by the defendants’ conduct from becoming a major cryptocurrency or, alternatively, having lost the chance to become a major cryptocurrency.

Binance, a defendant, applied to the Competition Appeal Tribunal to strike out the PCR’s claim for the “Forgone Growth Effect”, arguing in short that the BSV holders should have mitigated their losses by selling their BSV and buying other cryptocurrencies instead, and that the PCR’s alternative claim based on loss of a chance did not fall within the scope of that doctrine.

The PCR resisted that application on four grounds (§48), of which three were rejected by the Competition Appeal Tribunal. On the fourth – concerning the BSV holders’ alleged lack of awareness of the relevant events – the Tribunal held that “the evidence before us (just about) crosses the threshold” of showing “some BSV holders may reasonably have remained unaware of the delisting events throughout the relevant period” (§79, emphasis in original).

The Tribunal also struck out the PCR’s alternative “loss of a chance” claim, holding that that doctrine was inapplicable to the PCR’s case (§94).

The PCR appealed to the Court of Appeal, contending that the Tribunal was (i) wrong to find that the “market mitigation rule” applied at all to the claim; and (ii) wrong to strike-out the loss of a chance claim. The appeal was dismissed on all grounds. The Court of Appeal concluded: “To be clear, it seems to me that Binance’s application has succeeded here and below in striking out sub-class B’s claims: (i) for damages beyond the difference in value of their BSV holdings on 11 April 2019 and a point in time shortly after they were aware or bought to have been aware of the delisting events (and any quantifiable consequential losses such as trading fees), and (ii) for damages based on a loss of a chance. For the reasons I have already given, even if BSV holders reasonably remained unaware of the delisting events for much longer periods, I cannot see how they could ever claim more than the total value of their holding before the delisting events plus any quantifiable consequential losses such as trading fees” (§45).

Brian Kennelly KC and Jason Pobjoy KC acted for Binance.

A copy of the judgment is available here.