Bitcoin SV Holders Sue Binance, Kraken in $10 Billion Collusion Case - Here's What Happened

A $10 Billion Battle Heats Up in UK Court

The world of cryptocurrency is a battleground, and a lawsuit currently playing out in the UK Court of Appeal is a prime example.

At the center of the storm is Bitcoin SV (BSV), a controversial token delisted by major exchanges like Binance and Kraken in 2019.

The lawsuit, worth a staggering $10 billion, pits BSV holders against the exchanges, with accusations of collusion and missed fortunes fueling the fire.

The Birth of BSV

Bitcoin SV, or Bitcoin Satoshi Vision, emerged in 2018 as a fork from Bitcoin Cash. Its creation was driven by Craig Wright, a figure claiming to be the anonymous creator of Bitcoin, Satoshi Nakamoto (a claim later debunked in a London court).

The birth of BSV sparked a heated debate within the cryptocurrency community, with different factions supporting rival versions of the Bitcoin fork.

Who is Craig Wright

Craig Wright is an Australian computer scientist who claimed to be Satoshi Nakamoto, the pseudonymous creator of Bitcoin. He created Bitcoin Satoshi Vision (BSV), a cryptocurrency that is designed to follow Nakamoto's original vision for Bitcoin.

Last month, a UK judge ruled that Wright is not Satoshi Nakamoto. The judge also said that Wright lied extensively about being Satoshi and forged documents to support his claims.

When BSV Went Missing

Back in April 2019, and the crypto world witnessed a wave of BSV delistings. Major exchanges like Binance and Kraken pulled the plug on BSV trading, leaving token holders bewildered.

The reasons behind the delistings remained murky, with some exchanges offering vague explanations about BSV's behavior being incompatible with their values.

This lack of transparency fueled suspicion, paving the way for the lawsuit we see today.

BSV Holders Fight Back: A $10 Billion Lawsuit Takes Shape

In 2022, a group called BSV Claims emerged, representing over 240,000 UK investors who held BSV at the time of the delistings.

They launched a class-action lawsuit against Binance, Kraken, and other exchanges, accusing them of colluding to delist BSV in an anti-competitive manner.

The lawsuit seeks a whopping $10 billion in compensation, with a significant portion ($9 billion) attributed to the missed growth potential BSV holders allegedly suffered due to the delistings.

They arrived at this figure by analysing the gains made by other cryptocurrencies since the 2019 delistings.

This argument hinges on the assumption that BSV could have achieved similar growth if it had remained listed on the major exchanges.

Arguments and Counter-Arguments

The lawsuit has reached the UK Competition Appeal Tribunal (CAT). BSV Claims argue that the delistings were a coordinated effort to stifle competition and manipulate the market.

Binance, on the other hand, is contesting the lawsuit, particularly the $9 billion claim for lost growth potential. Their lawyers argue that BSV holders could have simply sold their tokens and reinvested elsewhere.

Binance Challenges BSV's Growth Potential Claims

Binance, a major defendant in the case, is seeking to dismiss a significant portion of the lawsuit.

Their argument centers on the speculative nature of BSV's claimed potential as a top-tier cryptocurrency.

Binance's lawyer, Brian Kennelly, contends that BSV holders made a voluntary decision to hold onto the token after the delisting.

He argues that they "could reasonably have sold it and reinvested it in comparable cryptocurrency."

BSV Claims, however, maintains that this argument should be addressed during the trial alongside the rest of the case.

UK Tribunal Hears Delisting Case Against Major Crypto Exchanges

The CAT began a crucial hearing on 5 June 2024, targeting six cryptocurrency exchanges for their delisting of Bitcoin SV (BSV) in 2019.

This development marks a significant escalation in a five-year-long saga surrounding the controversial token.

The list of defendants includes some of the most recognisable names in the cryptocurrency industry.

Binance Europe Services, the European arm of the world's leading exchange Binance, is a key player in the case.

Joining them are Erik Voorhees' ShapeShift, the popular non-custodial exchange, and Kraken, represented by its legal entity Payward.

Additionally, the Bitcoin exchange Bittylicious and its related entities are also facing the tribunal's scrutiny.

The case promises to be complex, with each of the six defendants reportedly deploying their own legal teams.

This translates to a significant number of lawyers involved and a vast amount of documentation to be examined by the tribunal.

The sheer volume of legal representation hints at the potential ramifications of the case, which could have a lasting impact on how cryptocurrency exchanges operate within the U.K.

The tribunal has estimated that the collective proceedings order, or CPO, will require three days of hearings to navigate the intricacies of the case.

This extended timeframe underscores the seriousness of the accusations and the potential complexities involved in reaching a verdict.

A $10 Billion Question – Who Should be Responsible?

The responsibility for this situation is a tangled web. While the lawsuit accuses exchanges of collusion, they also have a responsibility to protect their users from potentially risky assets.

Craig Wright's involvement with BSV casts a long shadow, but shouldn't BSV holders have conducted their own due diligence?

The CAT is currently hearing the case, with a decision expected by 7 June. The outcome of this lawsuit will have significant ramifications for the cryptocurrency industry.

If BSV Claims prevail, it could set a precedent for future disputes involving exchange delistings.

On the other hand, a win for Binance and the other exchanges could solidify their power and influence within the crypto market.

Regardless of the verdict, the BSV delisting saga serves as a cautionary tale, highlighting the complexities and potential pitfalls of the ever-evolving cryptocurrency landscape.