UK Tribunal Allows £9B Crypto Class Action Against Binance to Proceed
On Friday, July 26, 2024, the Competition Appeal Tribunal of the United Kingdom allowed a £9 billion ($11.5 billion) class action against major cryptocurrency exchange Binance to proceed.
The collective proceedings were brought by investors in the cryptocurrency Bitcoin Satoshi Vision (BSV) who allege that Binance illegally colluded with other trading platforms to delist BSV in 2019. Specifically, the claim alleges that Binance, alongside exchanges Bittylicious, Kraken, and Shapeshift, broke UK competition law by coordinating to prevent BSV from being traded. This reduced competition between digital assets in the UK and caused an estimated 240,000 UK investors to collectively lose £9.9 billion.
The class action is being led by BSV Claims Ltd., which represents the investors. If successful, it would be the first UK competition claim related to digital currencies. David Currie, former chair of the UK’s Competition and Markets Authority, serves as the director of BSV Claims.
Binance had applied to the tribunal to strike out the claim, arguing that BSV investors had a duty to promptly sell their holdings and reinvest elsewhere once delistings were announced. However, the tribunal agreed to allow the case to proceed, finding the claim provided a “realistic basis” that some investors may not have been immediately aware or remained unaware for some time.
In its ruling, the three-judge panel relied on an expert report from competition economist Robin Noble indicating there was potential for a “significant portion” of holders to be unaware of the delistings for months or years. While characterizing Noble’s evidence as “not particularly compelling” on its own, the tribunal said more evidence could emerge at trial.
BSV is a version of Bitcoin that aims to improve the technology’s scalability. It was spearheaded by computer scientist Craig Wright, who controversially claims to be Bitcoin’s pseudonymous creator Satoshi Nakamoto. However, a UK court ruled in May that Wright had lied extensively in attempting to prove this claim.
If the class action ultimately succeeds, it could reinforce that cryptocurrency exchanges are subject to the same competition laws as other businesses in the UK. According to Currie, the case also aims to strengthen investor protections and reinforce London’s status as a leader in crypto regulation. However, the legal battle has only just begun, and Binance may appeal the tribunal’s decision to let the case move forward.
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