Joshua Henslee on BSV investors lawsuit

Joshua Henslee on BSV investors lawsuit: When the game is rigged, that’s when governments have to step in

Early last week, BSV Claims Ltd filed the U.K. equivalent of a class-action lawsuit on behalf of BSV investors. Bitcoin thought leader Joshua Henslee released a video about the situation.

A brief recap of what’s happening

Henslee begins by summing up the situation: a U.K. collective proceedings order, the equivalent of a class-action lawsuit, was filed against Binance, Kraken, Shapeshift, and Bittylicious. This lawsuit was filed in response to the 2019 delisting of BSV and accused them of colluding to remove it from exchanges and harm investors.

The lawsuit is brought forward by Lord David Currie, the inaugural Chair of the Competition and Markets Authority. Henslee finds this interesting as it isn’t a lawsuit brought by the biggest BSV holders, but rather by a government heavyweight. The fact it’s coming from a former top regulator is a big deal, especially since he’s well known for being a free-market advocate interested in consumer protection.

The BSV delisting attack

Henslee reminds us that in April 2019, several exchanges, led by Changpeng Zhao of Binance, threatened to delist BSV if Dr. Wright kept making legal threats against Magnus Granath and others. Shortly after that, Binance delisted BSV, followed by Kraken, Shapeshift, and eventually Bittylicious. Henslee admits he’s not sure what happened with Bittylicious as he hadn’t previously heard of them. He likens this to lunchroom bullying—when some people see another getting bullied, they pile in. 

“When you do this, you’re creating news, and that news propagates,” Henslee says. This creates a moral hazard, hurting the price while creating an opportunity to short BSV. He says he’d bet money that people like CZ did short the coin, making a lot of money in the process.

It’s OK to delist…as long as it’s fair

Henslee states his belief that it is OK for exchanges to delist digital currencies as they see fit, in keeping with free market principles. However, he disagrees with the speed and coordination of how they did it. In his view, they should have given notice, allowing people to digest the information and decide what to do, perhaps taking the other side of the trade. However, when it’s done within two days, causing the liquidity to dry up quickly, there’s no opportunity for others to decide what they want to do.

Henslee also finds the reasons for delisting BSV less than convincing, reminding us that Kraken rushed to list LUNA2 after a huge crash that wiped out billions. “It’s not logically congruent,” he rightly says, laughing off the idea that these exchanges want to protect consumers from BSV while relisting tokens like LUNA2 without much thought.

Indeed, CoinGeek recently covered how Zhao is a hypocrite who sues others for defaming him which is exactly what Dr. Wright did to his critics. This delisting is more evidence of his hypocrisy.

Lord Currie highlights risks in the lawsuit filing

Henslee tells us that Lord Currie, who is leading the BSV investors lawsuit, pointed out that digital currencies are already volatile. Users shouldn’t have to deal with secondary risks such as mass delistings due to politics between players in the industry.

Overall, Henslee believes this is a good move. While typically, customers get peanuts, the larger point is that digital currencies can’t hide from the existing rules and regulations. Lord Currie stated outright that it was his intention to prove this.

CZ puts his foot in his mouth

One of the other reasons CZ stated for delisting BSV was that the fork caused the BTC price to drop, hurting holders. Henslee points out that this effectively says, “because of competition, we’re going to delist it.” He finds this incredible, saying that as time goes on, a light is being shone on the lies, cheating, double-speak, and tricks played by CZ and others looking to protect their wealth at all costs.

“When the game is rigged, unfortunately, that’s when governments have to step in,” Henslee concludes.

Key takeaways—The game is rigged, and this could fix it

This video points out that the digital currency markets are rigged, and exchange owners will do whatever is within their power to protect their wealth and power. However, Lord David Currie, a top U.K. regulator, and free-market advocate, aims to level the playing field by scoring a legal win for BSV investors. Henslee reminds us that the point here is not about the money; it’s about the principle.

Watch: The BSV Global Blockchain Convention panel, The Future World with Blockchain

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.

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