What does BSV investors’ lawsuit mean for Bitcoin and digital currencies in the UK?

News broke that BSV Claims Limited had filed a £9.9bn class action against digital currency exchanges Binance, Kraken, Shapeshift and Bittylicious.

The collective action order, which is the UK equivalent of a class action in the US, accuses the exchanges of colluding to delist BSV without good reason, reducing, preventing and distorting competition in the UK as a result.

The case is being brought on behalf of approximately 240,000 BSV investors and is being led by Lord David Currie of Marylebone, the first chairman of the Competition and Markets Authority. He said he wanted to play a role because BSV investors “deserve to be protected from anti-competitive behavior” and to “demonstrate that competition law applies in the sphere of crypto-assets in the same way it does to other economic activities.”

What does this mean for UK digital currency markets?

This lawsuit comes amid a wave of regulatory crackdowns around the world. Recently, the SEC accused Coinbase (NASDAQ: COIN ) of listing unregistered securities, prompting Binance US to quickly remove some currencies. In the UK, the Law Commission recommended the creation of a new category of personal property to protect the rights of owners of digital assets.

The BSV investors’ lawsuit is the latest in a long line of actions proving that existing laws, including those related to property ownership and free and fair competition, apply to an industry that until now has been too keen to pretend it exists outside of them . .

What does this mean specifically for the UK markets? It indicates that rogue operators will be punished, regulations will provide a safe, consumer-friendly environment for owning and trading digital currencies, and free and fair competition will finally flourish.

The UK has form here: it created world-class iGaming and finance industries by taking the same approach, and both play significant roles in the economy today. Indeed, the UK has stated that it intends to be a global hub for digital assets, and demonstrating that anti-competitive behavior will not be tolerated is a step in the right direction in that regard.

What does this mean for the exchanges in question?

While this lawsuit is a big deal for the UK and will show that it is committed to providing a level playing field for innovation, the picture does not look so good for the four exchanges being sued. Each has a questionable history, and the last thing any of them want is regulators looking into their internal processes, such as how they decide to list or delist digital currencies.

What kind of behavior justifies the claim that these exchanges have dubious histories? Binance has a long history of jurisdiction-hopping to avoid regulators, which eventually led to more than a few UK banks blocking payments to the exchange. Kraken was fined $1.25 million for offering illegal digital assets without filing with the CFTC. Its CEO, Jesse Powell, has publicly aired his disdain for the law on more than one occasion. In the case of Shapeshift, founder Erik Voorhees is an anarchist who opposes any regulation of the digital currency markets, and the firm failed to stop mass amounts of tainted BTC from being moved to its exchange in the past.

It is clear that the activities outlined above will no longer be tolerated. Will these exchanges adapt and start playing by the rules set by regulators? Binance has shown some willingness to do so, but Shapeshift and Kraken are led by ideological radicals and are therefore unlikely to swing to the more regulated environment. As the regulatory loop tightens, they are likely to go down and fight.

Is it likely that the lawsuit of the BSV investors will be successful?

In a word, yes. The fact that the very first chair of the UK’s competition regulator thinks it’s a case speaks volumes. On top of this, there was likely collusion in the BSV delisting attack for all to see. All of the entities sued acted within days of each other, publicly stating their intention to remove BSV on social media. There is evidence that can be used against them.

The great ‘crypto cleanup’ has begun

The BSV investors’ lawsuit is just one of many signals that the Wild West era in the digital currency industry is over. It is now clear to all that defamation will not be tolerated, AML/KYC regulations will apply across the industry, and removing digital currencies just because you have a grudge against prominent figures in a given ecosystem will have consequences.

While the so-called “crypto” anarchists and extremists who dominated and controlled the industry in its infancy will shout and protest as the regulators knock, the fact is that there is no stopping this inevitable process, and as loud as they shout, their reign. is over. A new era of utility, value and technological progress is dawning.

The big “crypto” cleanup has begun, and this class action lawsuit on behalf of BSV investors will play a central role. Once again, the UK is taking the lead in regulating an emerging industry with enormous potential. Rest assured, other regulators will be watching.

See: BSV Global Blockchain Convention panel, The Future of Digital Asset Exchanges & Investment

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