Offshore company backs collective claim against crypto exchanges
A company called Softwhale Holdings Limited is backing a new collective claim against cryptocurrency exchanges Binance, Kraken, Bittylicious and ShapeShift on behalf of UK consumers who held the cryptocurrency Bitcoin Satoshi Vision (BSV) on 11 April 2019.
The claim seek redress on behalf of consumers for the delisting of BSV in April 2019 by the Defendant cryptocurrency exchanges and the public collusion, via a series of tweets, in relation to that delisting.
According to some of the tweets, the delisting arose from personal animosity from the individuals in charge of these exchanges towards a high profile proponent of BSV. However, the effect of this conduct was to harm competition by artificially driving down the value of BSV, causing loss to holders of and investors in the coin. Following the delisting, it is alleged that the Binance and Kraken exchanges also seized some users’ BSV coins, depriving those users of their holdings.
The claims are brought under Article 101 of the Treaty on the Functioning of the European Union (“TFEU”) and/or pursuant to the Chapter I prohibition in section 2 of the UK’s Competition Act 1998 (the “Chapter I prohibition”).
Article 101 TFEU and the Chapter I prohibition both prohibit collusion between “undertakings” which have as their object or effect the restriction, distortion or prevention of competition in the UK. The collusive delisting of BSV by the Defendants is said to have restricted, distorted and/or prevented competition in the UK. In competition law an undertaking means that a group of several legal entities (such as multiple corporate entities which collectively run a cryptocurrency exchange) and/or natural persons may be held collectively responsible for anti-competitive conduct carried out by one of them.
Velitor Law, a London-based boutique disputes firm led by veteran Seamus Andrew, are the solicitors acting on behalf of BSV Claims Limited. Softwhale Holdings Limited is funding the case in full and also providing a direct undertaking to the Defendant Exchanges in the event of a costs order in their favour.