By CCN: Both Kraken and Bitmain have asked a federal court in Florida to dismiss a lawsuit against them brought by UnitedCorp, the news of which CCN broke back in December. The UnitedCorp lawsuit, broadly speaking, accuses Bitmain, Kraken, and others in concert with Roger…
By CCN: Both Kraken and Bitmain have asked a federal court in Florida to dismiss a lawsuit against them brought by UnitedCorp, the news of which CCN broke back in December. The UnitedCorp lawsuit, broadly speaking, accuses Bitmain, Kraken, and others in concert with Roger Ver of conspiring to manipulate the Bitcoin Cash price and deviate from network consensus by “winning” the hash war.
The most exciting aspect of the lawsuit is that it asks the court to consider whether Bitmain and others violated the public trust by diverting SHA-256 miners to the Bitcoin Cash ABC fork. UnitedCorp is a blockchain-focused company with a few patents and interesting concepts under its belt, which have mostly decided to go with the Bitcoin SV version of Bitcoin Cash.
Legal experts view crypto exchange Kraken’s attempts to dismiss the case as more valid than other efforts. Kraken argues that it has no incentive to manipulate the price of Bitcoin Cash downward as it earns more money in bull markets. The company notably listed Bitcoin SV after the hard fork last November and more recently delisted it.
Both parties argue that the hardfork did not affect the Bitcoin Cash price, which is a hard stance to take. Bitcoin Cash was at around $600 before the hardfork and quickly plummeted. Combined with Bitcoin SV, it has not since recovered, although bitcoin itself has pushed back toward its previous levels. Still, the behavior of traders cannot be attributed to a single company or its decisions, seems to be the logic that Kraken and Bitmain are basing their arguments on.
According to lawyer Stephen D. Palley, the outcome of the dismissal requests will be interesting.
“The motions appear to be largely briefed, so we will eventually receive a very interesting Order from the Court, resolving all of this. There are state law claims as well, which the defendants also seek to have dismissed. We’ll provide an update when the ruling is handed down. While motions to dismiss are difficult at this stage, if someone can state a plausible claim, I would not be shocked if the antitrust claims are dismissed, at least as to Kraken and Powell. I have a lesser degree of certainty about Bitmain, but some real doubts about the damages claim here, which sounds weak.”
Bitcoin SV has so far brought numerous interesting issues before courts. In one ongoing case, Craig Wright may have the opportunity for a court to officially tell him that he is not Satoshi Nakamoto (or the opposite). In this case, if it’s heard to its conclusion, the court may be asked to enforce the rules of consensus. Aspects of the case that are also interesting to cryptonaughts include the notion that Bitcoin.com may be guilty of fraud for diverting rented hashpower to the Bitcoin Cash network, even though people intended to pay for bitcoin mining. It would seem this would require a separate lawsuit.
However the case turns out, the findings of the court will be important to crypto moving forward. If it finds there is no ground to continue the case against all of the defendant parties, then future litigants of this nature will learn from its decision. If it finds that the case needs to proceed, we may have new guidelines for how crypto companies should behave regarding protocol changes. Perhaps most interesting of all, we’ll learn whether or not federal courts have jurisdiction over the behavior of crypto prices – can a few companies be held responsible for the actions of thousands of traders?
Last modified: January 10, 2020 3:10 PM UTC