The recent decision of the UK Court of Appeal in BSV Claims Ltd v Bittylicious Ltd & Others [2025] EWCA Civ 661, delivered by Sir Geoffrey Vos MR, provides important guidance for digital asset litigation, particularly in common law jurisdictions such as Cyprus. This short case-note focuses on the substantive issues concerning remedies against cryptocurrency exchanges that delist coins. While the case also has significance in other areas, particularly competition law and procedural aspects of the UK’s collective proceedings regime (commonly referred to as class actions), those matters fall outside the scope of this note.

Brief Background

The case was brought on behalf of approximately 243,000 holders of the cryptocurrency Bitcoin Satoshi Vision (BSV), targeting several major exchanges that had delisted BSV between April and June 2019. The claimants argued that the exchanges acted in a collusive and anti-competitive manner, resulting in a drop in the coin’s value, from approximately £55 to £39, and depriving them of potential future gains.

Although the subject of this appeal began as an application to strike out a portion of the claim, the Court's findings have broader implications, particularly regarding how damages are quantified in digital asset cases.

The Legal Issue

The key issue on appeal was whether holders of BSV could claim not just for the actual loss in value, but also for the loss of a chance that BSV might have appreciated significantly in value, like Bitcoin. In other words, were the exchanges liable for the speculative future value that the coin might have achieved had it not been delisted?

The Court of Appeal upheld the Tribunal’s decision to reject this theory. It found that the claimants were not entitled to recover damages based on a hypothetical future appreciation. The Court emphasised that, once the delisting events were public, the coin holders had an obligation to mitigate their loss.

Loss of Chance and the Market Mitigation Rule

The claimants attempted to frame their claim as a “loss of a chance” to benefit from BSV’s hypothetical growth. The Court firmly rejected this, stating that:

1. BSV was not a unique cryptocurrency without reasonably similar substitutes,
2. Cryptocurrencies are volatile, tradeable assets similar to shares, derivatives, or other financial instruments. Under the market mitigation rule, holders cannot claim for hypothetical future gains, only for actual loss, just as with other financial instruments affected by tortious conduct, and,
3. BSV holders had a duty to mitigate their losses. Therefore, they cannot recover losses that they could reasonably have mitigated.

As the judgment makes clear, a central reason for rejecting the BSV holders’ claim for loss of chance was the application of the market mitigation rule, which requires claimants to take reasonable steps to minimise their losses once they become aware of the wrongful conduct.

Further elaborating on the market mitigation rule, the Court found that BSV was a freely tradeable asset with no unique features that would have prevented holders from selling it and moving into other cryptocurrencies. As such, any losses beyond the actual drop in value were considered speculative and not recoverable.

Lacking a better expression, the Court’s own words are set out below:

“…it was not reasonable mitigation of the damage caused by the alleged tortious events to retain the damaged BSV coins in the vain hope that they might become a top-tier cryptocurrency. The loss caused could and should have been crystallised as soon as it was known about... If the holders chose to retain their damaged holdings of BSV, they did so at their own risk."

The judgment reinforces the position that, once claimants know or ought to know of a wrongful act that affects a tradeable asset’s value, their loss is capped at the value they could have realised at that point. This aligns with the general principle that loss of a chance is only compensable when the claimant can show that it had a real or substantial chance of obtaining that benefit.

Takeaways for Cyprus and other common law jurisdictions

While Cyprus lacks a collective proceedings regime, this decision provides valuable guidance for future digital asset claims:

1. Speculative damages will not be entertained: Claims based on what an asset might have been worth will face serious hurdles.
2. Digital assets are akin to other tradeable instruments: Courts are likely to treat cryptocurrencies as financial assets when assessing damages.
3. Mitigation duties apply to crypto assets: In line with this treatment of digital assets, Courts are more likely to view cryptocurrency holders as investors. Once an investor becomes aware of wrongful conduct affecting a coin’s value, they are expected to act prudently.
4. The “loss of a chance” doctrine is narrowly construed: It cannot be used to recover hypothetical future gains in volatile markets.

Conclusion

The BSV Claims Ltd decision clarifies that digital asset holders cannot shift investment risks onto defendants through broad damages theories. Where wrongful conduct affects a tradeable crypto asset, claimants must act promptly and responsibly. Failure to do so not only undermines the credibility of the claim, but also limits any potential recovery.

Also in the Lex Digitalis Series:

• Valuing Volatility: High Court ruling on breach of ETH loan
• Bitcoin, Property, and Private Keys: Reflections on Howells v Newport City Council
• Service of Court Order Directly to Cryptocurrency Wallets via Tokenisation: Hong Kong Judgment Sets New Precedent
• Interim Injunctions and the Digitized World: Freezing Orders, NFTs, and Cybercrime