The Bitcoin Cash ‘hard fork’ that many cite as the reason for the latest cryptocurrency market crash is now the subject of a lawsuit.
A ‘hard fork’ is a kind of software upgrade on a cryptocurrency network that creates a new blockchain, and sometimes a new cryptocurrency. The Bitcoin Cash hard fork that took place several weeks ago resulted in two version of Bitcoin Cash, supported by two opposing parties: the Bitcoin ABC version, which uses the ‘BCH’ ticker symbol; and Bitcoin Cash Satoshi’s Version, which uses the ticker symbol ‘BCHSV.’
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”Unfair Methods of Competition”
United American Corporation, a Florida-based marketing and sales-oriented telecommunications holding company, is suing Bitmain, Bitcoin.com, Roger Ver, and the Kraken exchange for using “unfair methods of competition” that caused damage to UnitedCorp and other stakeholders. In other words, the lawsuit accuses the defendants of market manipulation.
“We are bringing this suit on behalf of UnitedCorp because we believe strongly in the value and integrity of democratic, distributed and decentralized blockchain networks which will become more important with time,” said the president of UnitedCorp, Benoit Laliberte, in an official statement. “In order to maintain confidence in cryptocurrencies such as Bitcoin Cash, no person or entity can be allowed to control them.”
More specifically, UnitedCorp’s lawsuit has to do with allegations that Roger Ver and other supporters of the Bitcoin ABC software upgrade used ‘rented hashing power’ – they paid cryptocurrency mining firms to use their computing power to support their own version of the upgrade.
The Lawsuit Alleges that Bitcoin ABC ‘Hijacked’ the Fork
“It is clear that’s what supposed to be a democratic process was not, it was hijacked by the ABC camp,” said Lawry Trevor-Deutsch, VP of Corporate Affairs at UnitedCorp to MarketWatch, adding that he thought it was clear that Ver and his allies took control of the network during the upgrade.
However, there is some evidence to suggest that the opposing party attempted to do the same, and may have been successful if they had access to the same resources that Bitcoin ABC and Ver did. Craig Wright, the self-proclaimed Satoshi Nakamoto (creator of Bitcoin), led the charge against Bitcoin ABC, tweeting threats to crash the price of Bitcoin.
Oh. And @JihanWu and @rogerkver selling… they will also have to sell BTC to pay rented hash.
If this is a long war… expect 2014 prices in BTC… think what that does…
Have a nice day
— Dr Craig S Wright (@ProfFaustus) November 14, 2018
It’s unclear whether or not the lawsuit’s claims are substantial enough to turn the case into a full-on legal battle. However, the results of the case could set a legal precedent for the way that hard forks should be handled in the future–if there is, indeed, any way to control them. At present, governance on most blockchain networks usually has to do with who has the most money (and the most computing power). But hey, all’s fair in love, war, and crypto.
Meanwhile, cryptocurrency markets continue to flounder in the wake of the fork.