Reaffirmation of the Market Mitigation Rule for Cryptocurrency Losses: Limits on ‘Foregone Growth’ Damages

Introduction

BSV Claims Ltd v Bittylicious Ltd & Ors ([2025] EWCA Civ 661) is a landmark Court of Appeal decision concerning the application of the established “market mitigation rule” to collective claims by cryptocurrency holders. The representative brought opt-out proceedings on behalf of some 243,000 holders of Bitcoin Satoshi Vision (BSV), alleging that four exchanges (Bittylicious, Kraken, ShapeShift and Binance) colluded to delist BSV in April–June 2019, thereby depressing its market value.

The key issue on appeal arose from a strike-out application by Binance directed at sub-class B (approximately 75,000 holders who retained BSV through the date of proceedings). The representative claimed two heads of loss for sub-class B: (1) the immediate drop in BSV’s price (£55 to £39 per coin) and (2) a “foregone growth effect,” namely the hypothetical future appreciation of BSV to a top-tier cryptocurrency (claimed at nearly £9 billion in aggregate). The Tribunal upheld the immediate-drop claim but struck out the foregone-growth and loss-of-a-chance elements for holders aware of the delisting events. This appeal concerns the correctness of that approach.

Summary of the Judgment

The Court of Appeal dismissed the representative’s appeal in full.
It reaffirmed that once a claimant is (or should be) aware of wrongful conduct affecting a tradeable asset, the “market mitigation rule” requires them to enter the market to crystallise their loss.
Sub-class B holders who knew of the delisting events must have sold BSV or suffered the risk of holding; they cannot recover speculative “foregone growth.”
Loss-of-a-chance claims are inapplicable where ordinary causation and mitigation principles yield a clear measure of loss on the balance of probabilities.
The Court urged the Tribunal to encapsulate findings in a clear order for appellate certainty.

Analysis

Precedents Cited

The court relied on established authorities crystallising the market mitigation and breach-date rules, as well as principles governing loss-of-a-chance:

Aylwen v Taylor Joynson Garrett [2001] EWCA Civ 1171: Introduced the “breach date” rule that loss is ordinarily measured at the date when the wrong occurs if a market exists.
The Golden Victory [2007] 2 AC 353: Lord Brown emphasized the injured party’s duty to re-enter an available market and that speculative future gains lie at their risk.
Stanford International Bank v HSBC Bank [2022] UKSC 34: Clarified exceptions when no substitute market exists or claimant is unaware of breach, shifting the damages date.
Secretary of Health v Servier [2016] EWHC 2381 (Ch): Confirmed that the market mitigation rule presupposes claimant’s actual or constructive knowledge of the breach.
Allied Maples v Simmons & Simmons [1995] 1 WLR 1602: Set the framework for assessing loss-of-a-chance claims on a probability basis.
Equitable Life v Ernst & Young [2003] EWCA Civ 114, Salford City Council v Torkington [2004] EWCA Civ 1646, and Vasiliou v Haji-Georgiou [2010] EWCA Civ 1475: Discussed when loss-of-a-chance analyses are appropriate, generally where third-party actions critically influence outcomes.

Legal Reasoning

The Court’s reasoning can be grouped under two interlocking principles:

Market Mitigation Rule (“Breach Date Rule”): When a claimant has sufficient market information (actual or constructive) about a defendant’s wrongful conduct, an available market for substitutable assets obliges the claimant to mitigate loss by buying or selling. Any future speculation thereafter lies at the claimant’s risk. BSV was freely tradable and had clear comparators (e.g., Bitcoin and Bitcoin Cash). Sub-class B holders who knew of the delisting could have sold BSV and purchased substitutes; their maximum recoverable loss is the difference between BSV’s market prices at the breach and at the time they ought to have mitigated.
Loss of a Chance: A claimant may recover on a lost-chance basis only when there is no clear balance-of-probabilities test for causation or valuation—typically where the outcome depends on third-party conduct. Here the question (would BSV have become top-tier?) is resolvable on the balance of probabilities and valuation of its prospective trading price is a standard damages exercise. The Tribunal and Court concluded that a loss-of-a-chance approach was neither necessary nor appropriate.

Potential Impact

This decision has several important ramifications for future litigation involving digital assets and collective claims:

It extends the orthodox market mitigation principle to cryptocurrencies, putting holders on notice that they must crystallise loss once aware of adverse events.
It curtails speculative “foregone growth” damages in cases where a substitute market is available, reinforcing proportionality in recovery.
It limits the scope of loss-of-a-chance claims in asset-value contexts, affirming that speculative future appreciation is not recoverable where traditional causation suffices.
It prompts tribunals to issue clear orders immediately upon decision to avoid procedural uncertainty on appeal.

Complex Concepts Simplified

Market Mitigation Rule: A claimant must mitigate losses by buying or selling in an available market once aware of a breach. Future price changes thereafter are the claimant’s risk.
Breach Date Rule: Damages for tradable assets are measured at the date of the wrongdoing (or shortly thereafter) if substitutes exist.
Loss of a Chance: A remedial doctrine allowing recovery for the loss of a real or substantial chance of a benefit when outcomes hinge on uncertain third-party actions.
Foregone Growth Effect: An expert-coined term here for the hypothetical appreciation of BSV had the delisting not occurred; the court held it speculative and unrecoverable where mitigation was possible.

Conclusion

BSV Claims Ltd v Bittylicious Ltd & Ors reaffirms settled principles in the digital-asset arena: holders aware of market-affecting misconduct must mitigate by trading, and speculative future gains cannot underpin disproportionate damage awards. The judgment delivers clarity on collective claims against exchanges and underscores the judiciary’s insistence on applying established tort-damages rules to new asset classes. Future claimants and tribunals alike should take heed: knowing, tradable assets carry an immediate duty to mitigate, curbing limitless “what-if” scenarios in litigation.