Court of Appeal drastically limits damages available in BSV investor class action

Coin Geek

23-05-2025

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The U.K. Court of Appeal has rejected an appeal over the damages available to BSV investors over a group of exchanges' delisting of BSV, heavily reducing the potential damages available in the case.
The investors—represented by special-purpose company BSV Claims Limited—are suing a group of exchanges (Binance, Bittylicious, Shapeshift and Kraken) over their decision to delist BSV in 2019. They allege that the delistings were coordinated between the exchanges and therefore amounted to a violation of the U.K.'s Competition Act. It's the first time that a CPO—the U.K. equivalent of a class action lawsuit—has been granted with respect to a digital asset claim.
The question before the Court of Appeal was whether the Competition Appeal Tribunal (CAT)—which gave the green-light to the lawsuit in 2024—was right to consider that BSV investors were obligated to mitigate their own losses by selling their coins for a suitable alternative once they became aware (or reasonably ought to have been aware) that their coins had been delisted. If so, it would mean that when the case goes to trial BSV investors would only be able to claim the difference between the value of BSV at the time of the delistings and the value of BSV at the time they should have been aware of it.
Today, the Court of Appeal dismissed the investors' appeal, agreeing with the Competition Appeal Tribunal in limiting the available damages:
'Once [the BSV holders] knew of the delisting events, their investment decisions were nothing to do with the defendants. They had a duty to mitigate their losses, and they cannot recover losses that they could reasonably have mitigated. In relation to tradeable assets such as BSV, that meant selling them or retaining them, but either way their maximum loss is calculated by reference to the value they could have received for them once they knew or ought to have known of the wrongful conduct.'
BSV Claims Limited had argued that the question of whether BSV is a unique asset (such that there are no reasonable alternative investments by which to mitigate the investors losses) should have been left for trial. The Court of Appeal rejected this argument, citing an expert economic report provided by the claimants which used BTC and BCH as comparator coins in valuing the damage inflicted on BSV's long term prospects:
'BSV was obviously not a unique cryptocurrency without reasonably similar substitutes. This is, as the Tribunal said, the representative's own case, since it uses the comparators of Bitcoin and Bitcoin Cash to make its claims for the so-called 'forgone growth effectt.''
The forgone growth effect here refers to the speculated future value BSV could or would have attained if the delistings hadn't have taken place.
Though the lawsuit survives this ruling (a trial date has yet to be set), it takes the eye-watering sums initially claimed by the investors from multiple billions to what is likely to be in the tens of millions of pounds—assuming that BSV Claims does not appeal the decision further.
Ruling highlights tension between old law and new technology
BSV investors reading the Court of Appeals ruling will no doubt be raising their eyebrows at the comments made by the Justices as to the so-called 'reasonable steps' they should have taken to mitigate their own losses.
After all, what 'suitable alternative' could there be when the primary investment thesis for BSV is that there is no other BSV: it's the only asset that maintains the original vision of Satoshi Nakamoto as set out in the white paper. Telling a BSV investor that they should have sold up for BTC would be akin to telling someone with a contract to purchase lumber that they should have sought steel, instead.
You can practically see the force of this point by quoting the original formulation of this rule, set out in Golden Strait Corp v Nippon Yusen Kubishka Kaisha and quoted by the CAT: 'Essentially it applies whenever there is an available market for whatever has been lost and its explanation is that the injured party should go out into that market and make a substitute contract to mitigate (and generally thereby crystallise) his loss. Market prices move, both up and down. If the injured party delays unjustifiably in re-entering the market, he does so at his own risk: future speculation is to his account.'
That seems perfectly sensible in the case of a normal commercial contract. If a fruit supplier has a contract with a grocer to sell a container of bananas, but the grocer rejects delivery at the last minute and refuses to pay, and then seven days after the original delivery date the entire stock rots, it's reasonable to have required the supplier to go back to the market and find an alternative contract before that point so that they can mitigate their losses.
But trying to graft this formulation onto the digital asset market quickly leads you into gibberish for the reasons stated above. Digital assets are not fungible between each other—on the contrary, they're so different that even considering them the same asset class can seem ridiculous. What reasonable alternative can there possibly be for a BSV investor who made their investment on the thesis that BSV is the only technical implementation of the original Bitcoin white paper available? If all exchanges suddenly decided to delist BSV, knocking its development off course to a degree that it may never recover despite its technical value, it hardly makes sense to insist the BSVer go out and buy BTC. Let's say the banana seller in our example had no other grocers to sell to: would it be reasonable to expect him to start making and selling banana cakes, lest he lose his entitlement to damages? Of course not.
In other words, to apply the market mitigation rule to digital assets—particularly involving those with highly specific and technical investment theses like BSV—is hard to do without contorting the rule beyond recognition.
Unfortunately, the effect of the CAT's original decision—and the Court of Appeal's affirmation—was to take all of this discussion off the table, forcing trial to proceed on the basis that all digital assets are similar enough for the market mitigation rule to apply. Given the novelty of this case, both as a competition case and as a collective proceeding, now allowing these questions to be fully explored at trial with evidence will be disappointing to many.
Just ask yourself: if some illegal conduct drastically reduced the value of the digital asset you've most confidently invested in, would you be happy to be told that you should simply have gone out to buy BCH?
A trial date for BSV Claims Limited v Bittylicious, Binance, Kraken and Shapeshift has yet to be set. More information on the case can be found on the claimant's website .
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