Binance Fails to Get $13 Billion Class Action Suit Kicked

By Mark Hunter

2 weeks agoTue Jul 30 2024 07:22:51

Reading Time: 3 minutes

• A £9.9 billion ($13 billion) class action lawsuit by BSV holders is set for trial after Binance’s dismissal attempt failed
• The lawsuit, funded by Calvin Ayre’s BSV Claims entity, has alleged collusion among exchanges to delist BSV in 2019
• A three-judge tribunal has determined the case is “more than fanciful,” although it warned that the evidence was far from compelling

A £9.9 billion ($12.9 billion) class action lawsuit representing BSV holders who suffered when multiple exchanges delisted the coin in 2019 is set for trial after Binance failed to get the case kicked out. The exchange giant is one of four targeted by the Calvin Ayre-funded BSV Claims entity, which alleged that hundreds of thousands of BSV holders in the UK suffered when the exchanges colluded to delist the coin following Craig Wright’s libel bonanza. The three-judge tribunal found that the evidence “just about” shows the case has a realistic chance of success at trial, and so rejected Binance’s petition.

Delistings Prevented BSV From Being “Top-tier” Crypto

BSV Claims was set up in 2022 in order to pursue a case against Binance, Bittylicious, Kraken, and Shapeshift, alleging that the four exchanges colluded to delist BSV in the wake of its ideological father, Craig Wright, firing libel lawsuits out like confetti in early 2019. 

These actions, BSV Claims argues, “caused the price of BSV to fall in the immediate aftermath,” leading to “immediate and persistent long-term effects for BSV holders (including the ‘forgone growth effect’ meaning the lost opportunity of BSV developing into a ‘top tier’ cryptocurrency and the expropriation of coins from users of the Binance or Kraken cryptocurrency exchange) thereby caused loss and damage.”

BSV Claims wants the four exchanges punished for engaging in “an anticompetitive agreement and/or concerted practice which had as its object or effect the prevention, restriction or distortion of competition within the internal market,” with the class action suit alleging that some 240,000 BSV holders in the UK alone were harmed by their actions.

Evidence Was “Just About” Strong Enough

Binance filed to have the case struck out in February, arguing that the BSV holders should have mitigated their losses by selling their BSV and buying other cryptocurrencies instead, but the panel rejected its argument and unanimously ruled that the motion be dismissed and the case progress to trial. 

The news wasn’t all good for BSV Claims, however, with the judges warning that the evidence was far from convincing:

First, we have concluded that we cannot exclude at this stage the possibility that at least some BSV holders may reasonably have remained unaware of the delisting events throughout the relevant period… However, the evidence currently before us as to the extent to which any BSV holders could reasonably have remained sufficiently unaware so as to exclude the market mitigation rule is (as we have said) scant and high-level, with no detailed explanation of the further evidence that is expected to be available at trial. If the evidential position is not substantially improved following further investigation, the PCR may well not

be able to establish any case at all as to the forgone growth effect.

It seems, therefore, that BSV Claims is going to have to come up with more convincing evidence, with the panel reinforcing its ruling that the company didn’t provide “particularly compelling evidence” over its claims. Despite this, the case still progresses to the next stage, but the judges had a warning for the plaintiffs:

Nonetheless, the test at this stage (whether we are considering strike out or reverse summary judgment) is not whether the PCR’s case has been established on the facts, but whether it has a realistic as opposed to a fanciful prospect of success. We consider that the evidence before us (just about) crosses the threshold of providing a realistic basis for the proposition that at least some BSV holders may reasonably have remained unaware of the delisting events throughout the relevant period.

BSV Claims is therefore set to get its day in court, although there could be a sticking point: Software Holdings, the entity funding the lawsuit which is run by Wright’s financial backer Calvin Ayre, will have to comply with the Association of Litigation Funders Code of Conduct requirements on cash flow and capital adequacy.

Ayre is famously reluctant to have anyone look into his financial dealings, but a certain level of openness will be needed on his part to satisfy the court that the funding of the lawsuit comes from legal means and it can afford to see the suit through to the end.