Kraken and Binance delisted Bitcoin SV. Now, they’re being sued for $13bn

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As an analyst with a background in finance and experience in the cryptocurrency market, I find this case intriguing and complex. The ongoing legal battle between Bitcoin SV (BSV) and several major crypto exchanges, including Binance, Kraken, Bittylicious, and ShapeShift, is far from over.

As a researcher studying the cryptocurrency market, I can recount an event that occurred back in 2019 when Bitcoin SV (BSV) was delisted from major exchanges following Dr. Craig Wright’s controversial claim of being Satoshi Nakamoto. Consequently, investors holding this digital asset experienced substantial financial losses due to the coin’s instability and decreased liquidity following these delistings. Now, a class action lawsuit has been initiated against the involved parties alleging damages incurred during this tumultuous period.

As a seasoned analyst, I’ve recently witnessed a profound legal setback for Craig Wright. The court unequivocally determined that his claims of being Bitcoin’s enigmatic creator, Satoshi Nakamoto, were not only extensive but also repeated lies. Now, another cryptocurrency-related controversy is brewing in the British courts.

In London, the Competition Appeals Tribunal is currently examining a case concerning Bitcoin Satoshi Vision, or Bitcoin SV as it’s commonly referred to. This digital currency emerged in 2018 as a result of a split, or hard fork, from Bitcoin Cash.

Dr. Wright is a strong advocate for Bitcoin SV (BSV) and believes it is the authentic form of Bitcoin. He contends that BSV’s larger block size makes it possible for more affordable and quicker transactions on the blockchain network.

Let’s go back to the class action lawsuit underway at the tribunal. The plaintiff, BSV Claims Limited, is taking legal action against four major crypto exchanges: Binance, Kraken, Bittylicious, and ShapeShift. They seek compensation worth up to £10 billion ($12.8 billion).

The class action lawsuit alleges that these trading platforms conspired to remove BSV from their lists in April 2019. This collusion, according to the lawyers, artificially decreased the coin’s value and resulted in financial losses for British investors who had bought it.

As a researcher, I find it intriguing to delve into the backgrounds of those at the helm of BSV Claims Limited. Lord David Currie of Marylebone stands out as an influential figure with an impressive resume in British politics. He has served pivotal roles including chairing the Competition and Markets Authority and being the founding chairman of Ofcom.

As a researcher, I’ve discovered that this organization boasts the support of several influential political figures. Among them are Lord Andrew Tyrie, a seasoned economist with a 20-year tenure as a Member of Parliament and a former chairman of the Treasury Select Committee, and current MP Sir Robert Buckland. In his past, Sir Robert held the position of justice secretary.

What’s going on?

BSV Claims Limited argues that the decision to delist BSV by certain exchanges constituted an anticompetitive act that breached competition law. This legal action is reportedly on behalf of approximately 244,000 British investors who owned the cryptocurrency. The opt-out structure of the lawsuit implies that all affected investors are assumed to be entitled to compensation unless they explicitly opt out.

As a crypto investor, I’ve come across a class action lawsuit where the funds are being raised by Softwhale Limited to cover potential damages. However, the details about this company’s operations are scarce. Based on Bloomberg’s reports, Softwhale is financially backed by Calvin Ayre – a Canadian entrepreneur with a gambling past and a known supporter of BSV.

One aspect of the evidence presented by BSV Claimes Limited revolves around tweets exchanged during the cryptocurrency’s delisting. Five years ago, an anonymous Bitcoin advocate named Hodlonaut publicly accused Wright of being a “fraud” and a “scammer” on Twitter. (Subsequently, Wright initiated a defamation lawsuit against Hodlonaut, which he eventually lost.) In response to this, Changpeng Zhao, the then-CEO of Binance, expressed his support for Hodlonaut through a tweet in April 2019.

Craig Wright is not Satoshi.Anymore of this sh!t, we delist! — CZ 🔶 BNB (@cz_binance) April 12, 2019

Within a mere three-day span, CZ carried out his warning – Binance subsequently declared that it would list all BSV trading pairs. Previously, Binance had justified this decision:

As a diligent analyst, I regularly assess every digital asset featured on our platform to maintain the superior standard we pride ourselves on.

Binance

The announcement from the largest global exchange regarding BSV’s delisting caused its value to drop dramatically by nearly 50% within just two days. In contrast, this digital currency was once ranked 12th in terms of market capitalization back in 2019. However, its current standing is now at number 75 as the prices remain flat while other major altcoins experience a robust bull market.

Binance argued before the London tribunal on Wednesday that a significant portion of the case, centering around BSV’s potential to rise as a major cryptocurrency, should be dismissed. Brian Kennelly, Binance’s legal representative, stated that investors choosing to keep holding BSV made this decision voluntarily and had the freedom to opt for an alternate investment instead.

Meanwhile, Kraken has previously described this lawsuit as “baseless.” 

At the ongoing three-day proceeding, BSV Claims Limited is seeking certification for their class action through a collective proceedings order. This stage signifies that the case is still in its infancy. If successful, the matter would progress to a trial. However, even if approved, the organization acknowledges that reaching a decision on damages could take between two to three years.

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2024-06-06 17:04