London, 28 Sept 2022 : In August Velitor client, BSV Claims Ltd filed a landmark competition case against major cryptocurrency exchanges seeking damages of up to £9.9 billion.
A summary of the claim, being brought in the Competition Appeal Tribunal (“CAT”) on behalf of an estimated 240,000 UK investors in Bitcoin Satoshi Vision (“BSV”), is now listed on the CAT tribunal website BSV Claim CAT website.
The UK entities of three of the exchanges, Shapeshift and Kraken and Bittylicous have acknowledged service of the claim and appointed legal representation.
BSV Claims has requested permission to serve out of jurisdiction on the remaining exchanges who are not based in the UK, the outcome of which is expected very soon.
Recap on the claim:
The claim, a legal first in applying competition law to the digital assets sector, seeks an opt-out collective proceedings order (“CPO”) on behalf of the estimated 240,000 UK investors.
The class members are represented by BSV Claims Limited led by Lord Currie of Marylebone, the inaugural Chair of both Ofcom and the Competition and Markets Authority, who is a former professor of economics and a former Dean of the Cass Business School.
The claim alleges that:
UK BSV holders suffered losses estimated up to £9.9 billion because of the delisting of BSV by exchanges Binance, Bittylicious, Kraken and Shapeshift in April 2019.
The application states that the four exchanges combined in such a way as to breach the Competition Act 1998 by reducing, preventing, or distorting competition in the United Kingdom. Kraken and Binance are also alleged to have caused losses to investors by forcibly converting BSV to other cryptocurrencies without investors’ consent.
The four exchanges colluded to damage the prospects for BSV by delisting which prevented trading. It is alleged the exchanges did this deliberately, harming BSV and reducing competition in the UK between BSV and other digital assets.
The exchanges caused investors to lose money and gave them no meaningful opportunity to withdraw their BSV. The case argues that the exchanges’ actions curtailed BSV’s ability to become successful, despite its inherently superior technology.
- The claim is for a collective proceedings order (“CPO”) under section 47B of the Competition Act 1998.
- The claim is being brought in the U.K. Competition Appeal Tribunal (the “CAT”). The CAT is a specialist court dealing with competition law issues. It is a court of first instance, at the same level as the High Court.
- The claim is supported by independent expert valuation evidence obtained from Oxera Economics. Oxera is a well-regarded economics consultancy with extensive experience of calculating damages in competition cases.
- Oxera estimates the damage caused by the defendants at up to £9,938.1 billion, including interest to 21 July 2022. Actual damages awarded will be determined by the CAT.
- The damages received by investors will depend on the circumstances in which they held or sold BSV following the delisting. There are three distinct groups.
- The first group suffered losses because of selling after the delisting because the delisting reduced the price of BSV.
- The second group suffered losses because they were deprived on the chance of selling BSV for a much higher price, which BSV would have achieved but for the delisting.
- The third group suffered losses because they were customers of Binance and Kraken and had their BSV forcibly converted into different coins. Investors in the third group were therefore deprived of the chance to sell BSV at higher prices that would have prevailed but for the delisting.
- Velitor is supported by a counsel team at Brick Court Chambers and 4 New Square (Sarah Ford KC and Sarah Bousfield of Brick Court and Nick Bacon KC of 4 New Square). It is being funded by Softwhale Ventures.
About Velitor: Our ambition at Velitor Law is simple: we want to be the UK’s most prestigious claimant disputes firm, bringing together the most perceptive and effective legal minds and backing them with unrivalled resources, progressive technologies and a clear purpose. We have a unique focus on claimants which, in turn, provides us with a single-minded mission to seek justice and recourse against seemingly insurmountable institutions. And our experience of handling high-profile cases, at the highest level, for them is second to none.
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