Court of Appeal upholds established principles to reject novel claim for crypto growth losses

This article was first published in the August/September issue of Butterworths Journal of International Banking and Financial Law

In BSV Claims v Bittylicious [2025] EWCA Civ 661, the English Court of Appeal handed down a significant judgment on quantifying losses in cryptocurrency claims. In this In Practice article the authors summarise the decision and provide some practical takeaways.

BSV Claims Limited, acting as class representative, brought collective proceedings against several exchanges, alleging they had anti-competitively delisted the cryptocurrency BSV¹.

The representative’s expert identified two types of loss²: (i) the “immediate and persistent effect” (the immediate fall in BSV’s value allegedly caused by the delisting) and the “forgone growth effect” (the loss of the growth in BSV’s value (or alternatively the loss of a chance of growth in its value), which would have occurred when / if it became a “top-tier cryptocurrency”).

One exchange applied to strike out the claim brought on behalf of a sub-group of BSV holders (Sub-Class B) which was based solely on the forgone growth effect.

The Competition Appeal Tribunal: (i) held that if the relevant BSV holders were actually or constructively aware of the delisting events (which was a question for trial), then the ‘market mitigation rule’³ applied as there was an available market of substitutable cryptocurrency investments⁴ and (ii) struck out the loss of chance claim for Sub-Class B, on the basis that the market mitigation rule applied equally to that claim, and in the alternative the Sub-Class B losses did not rely on any feature that would render a loss of chance analysis appropriate⁵. As a result, claimants who were actually or constructively aware of the delisting could only claim for the immediate and persistent effect; the forgone growth effect was irrecoverable. The representative appealed.

The Court of Appeal considered whether the Tribunal: (i) was correct in applying the market mitigation rule; and (ii) was right to strike out the loss of a chance claim.

 

Decision

The appeal was dismissed.

On the market mitigation rule, the Court held that it was clear “that those Sub-Class B holders who knew of the delisting events could have mitigated their loss by divesting… [as] there was an available market of substitutable cryptocurrencies”⁶. The Court highlighted (as the Tribunal had before it⁷) that the evidence given by the representative’s own expert confirmed the availability of such a market⁸. The Court went on to confirm⁹ that BSV “was obviously not a unique cryptocurrency without reasonably similar substitutes” and stated that cryptocurrencies should not be treated “as if they were real property… They are tradeable assets, equivalent (in this context) to shares, derivatives or other tradeable financial instruments”. The Court concluded that: “Once the Sub-Class B holders knew of the delisting events, their investment decisions were nothing to do with the defendants. They had a duty to mitigate their losses…. their maximum loss is calculated by reference to the value they could have received for them once they knew or ought to have known of the wrongful conduct”¹⁰.

The Court also held that the loss of a chance claim could not survive the Claimants’ failure to mitigate by entering the market: “[the loss of a chance claim] assumes that it was reasonable mitigation for the Sub-Class B holders to have retained their holdings once they became aware of the delisting events. To be clear, it was not reasonable mitigation... ”¹¹. The Court went on to suggest that the Sub-Class B Claim “did not rely on any feature which would render a loss of chance analysis appropriate”, albeit it stopped short of fully endorsing the Tribunal’s conclusions in this respect¹².

 

Practical Takeaways

Valuing Loss

The Court of Appeal has applied long-established principles to resolve a novel question regarding valuing losses in cryptocurrency proceedings.

Recognising the volatile and tradeable nature of cryptocurrency, the Court held that the Sub-Class B holders could not claim losses relating to speculative future gains in market value, because those holders should have mitigated that loss in the market.

Going forward, it seems unlikely that judges will be sympathetic to attempts to recover losses arising from speculation as to the future market value of cryptocurrencies. However, it is notable here that the representative’s own expert confirmed the substitutability of the cryptocurrency in issue. It remains to be seen how a court will approach cryptocurrency claims if the expert evidence suggests the opposite, and we may yet see creative claimants looking to adduce expert evidence which contends that a particular cryptocurrency is so unique that there is not a suitable market substitute for it (albeit the Court’s remarks here perhaps indicate that judges will approach such an argument with some scepticism).

Pleadings

The Court also provided a salutary point on the drafting of pleadings, highlighting that the pleadings ought to have been drawn by reference to legal concepts rather than the expert’s formulations such as the ‘forgone growth effect’¹³. This is a key point for practitioners to guard against when preparing pleadings by reference to expert reports.

 

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¹BSV Claims v Bittylicious (and others) [2025] EWCA Civ 661, 1.
²BSV Claims v Bittylicious (and others) [2024] CAT [48], paragraph 17. See further BSV Claims v Bittylicious (and others) [2025] EWCA Civ 661, paragraph 21.
³A rule which applies whenever there is an available market for what has been lost, and which requires the injured party to go into that market to make a substitute contract to mitigate (and generally crystallise) his loss. If the injured party delays in entering into a substitute contract, they carry the risk of (and cannot claim damages in respect of) any future movements in the market per The Golden Victory [2007] 2 AC 353, paragraph 79.
⁴BSV Claims v Bittylicious (and others) [2024] CAT [48], paragraph 64 - 65. See further BSV Claims v Bittylicious (and others) [2025] EWCA Civ 661, paragraphs 9 – 11.
⁵BSV Claims v Bittylicious (and others) [2024] CAT [48], paragraphs 89 – 91 and 94 - 95.
⁶BSV Claims v Bittylicious (and others) [2025] EWCA Civ 661, paragraphs 13 and 33 - 35.
⁷BSV Claims v Bittylicious (and others) [2024] CAT [48], paragraphs 63 - 65.
⁸BSV Claims v Bittylicious (and others) [2025] EWCA Civ 661, paragraph 13.
⁹BSV Claims v Bittylicious (and others) [2025] EWCA Civ 661, paragraphs 33 - 34.
¹⁰BSV Claims v Bittylicious (and others) [2025] EWCA Civ 661, paragraph 35.
¹¹BSV Claims v Bittylicious (and others) [2025] EWCA Civ 661, paragraph 38.
¹²BSV Claims v Bittylicious (and others) [2025] EWCA Civ 661, paragraph 39.
¹³BSV Claims v Bittylicious (and others) [2025] EWCA Civ 661, paragraph 25.