Several centralized exchanges are facing a £9.9 billion class action lawsuit. The lawsuit represents Bitcoin SV (BSV) investors after Binance, Kraken, Shapeshift, and Bittlylicious exchanges collectively delisted the token.
CEXs sued over Bitcoin SV delisting
According to the lawsuit, the four centralized exchanges conspired to damage the reputation of BSV after delisting it without providing a valid reason. The delisting reduced, prevented, and changed competition for digital assets within the United Kingdom, violating the Competition Act of 1998.
The lawsuit further adds that Binance and Kraken caused additional losses for BSV investors after converting BSV held on user accounts into other cryptocurrencies without consulting the account owners.
The Competition Appeal Tribunal (CAT) has filed the lawsuit in question while the Velitor law firm is representing the plaintiffs. In the UK, this kind of claim is known as the collective proceedings order (CPO). The claim differs from class action lawsuits typically filed in the United States.
The claim represents an estimated 240,000 investors of the BSV digital asset, but it also contains an opt-out clause. Therefore, any represented investors who choose not to be part of the lawsuit can opt out.
The lawsuit has involved some of the most popular names in the law sector. The company’s director, created solely to file this lawsuit, Lord David Currie, was the inaugural Chair of the Competition and Markets Authority, the competition regulator in the United Kingdom.
The founder and managing partner at Velitor, Seamus Andrew, said that many people had lost their investments because of the actions taken by exchanges. Therefore, the law firm was committed to proving to these exchanges that they harmed the value of BSV and that small investors suffered massive losses.
The 2019 BSV delisting
Cryptocurrency exchanges have been criticized because they list and delist digital assets, including low cap cryptos. The BSV delisting happened in April 2019, with the four exchanges mentioned in the CPO delisting the token within 24 hours.
At the time, Binance’s CEO, Changpeng Zhao, expressed his frustrations over the repeated claims by Craig Wright that he was Satoshi Nakamoto, the creator of Bitcoin. He also said that the Bitcoin SV fork had caused Bitcoin to drop below $6K, harming many investors. The coin was delisted from Binance a few days later.
After the delisting, several other companies followed suit, saying they would drop the token from their platforms. The CEO of Shapeshift, Erik Voorhees, said he would stand with Zhao in delisting the token. Kraken later posted a Twitter poll asking its followers whether the exchange should delist BSV. Kraken delisted BSV shortly after the poll.
Bitcoin SV managed to withstand the coordinated wave of delistings in 2019. Moreover, the token is still listed on top cryptocurrency exchanges such as Huobi and OKX. BSV reached an all-time high of $489.75 in April last year, but with this year’s bear market, it has dropped by 87% from these levels.
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This article was written for Business 2 Community by Ali Raza.
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