Plaintiffs in Florida have brought a suit against Bitcoin Cash ABC, it’s leader Roger Ver, the Kraken cryptocurrency exchange, and others, arguing the parties colluded, “to take control of the Bitcoin Cash network for personal gain…which caused a global capitalization meltdown of the Bitcoin Cash network at the expense of others.”
The suit announced today by Miami-based United American Corp or UnitedCorp (OTC: UAMA) alleges, “the defendants collectively engaged in unfair methods of competition and…manipulated the Bitcoin Cash network for their benefit and to the detriment of UnitedCorp and other Bitcoin Cash stakeholders.”
UnitedCorp is a marketing and sales-oriented telecommunications holding company that provides voice and data products and services using voice over Internet protocol to customers in North America.
UnitedCorp also states it holds the rights to manage a portfolio of patents and proprietary technology in Blockchain technology and owns and operates the “BlockchainDomes” which are said to provide heat for agricultural operations using computer equipment in naturally cooled data centers where efficiency and low-cost operations are a priority.
Plaintiffs are seeking injunctive relief and compensatory damages.
Bitcoin Cash was created August 1st, 2017, as a “fork” (code-copy) of the Bitcoin blockchain.
Bitcoin Cash was created to address scalability problems in Bitcoin.
Bitcoin Cash’s creator, Roger Ver, had been an early advocate of Bitcoin and was responsible for a significant amount of the merchant adoption of Bitcoin for retail payments.
But during the Bitcoin bull run of 2018, when Bitcoin reached an all-time high price of almost $20 000 US, the network became congested. Settling a transaction could take hours- which was bad for retail.
As a remedy, Ver proposed increasing the size of Bitcoin’s underlying blocks from one to eight megabytes. Theoretically, this would enable the blockchain to handle more transaction volume.
But the proposal was rejected by “Bitcoin Core.” Ver went ahead and created Bitcoin Cash anyways, and Jihan Wu, the CEO of Bitmain, the planet’s largest Bitcoin mining company, backed the Ver chain.
Bitcoin Cash forked, and thereafter debuted on exchanges at a price of $555 dollars.
Crypto bull markets ensued, and in late December 2018, Bitcoin Cash traded briefly for $4000 USD.
But the bear market of 2018 then proceeded to hammer Bitcoin Cash, as it did every other crypto.
This week, the price of Bitcoin Cash dipped briefly below $100 USD. Bitcoin (Core) traded for $3600, down a whopping 82% from all-time highs.
To complicate matters, a civil war recently erupted inside Bitcoin Cash, and the chain was once again “forked” into two chains: Bitcoin ABC and Bitcoin SV.
During the course of the latest code-split, purveyors of the competing chains accused each other of sabotage and unfair practices.
The suit from UnitedCorp alleges, “defendants took control of the Bitcoin Cash network immediately after the November 15th software upgrade…through the use of ‘rented hashing’…artificially…(took) control of the network and use(d) this computer power to favor the adoption of the Bitcoin ABC…over other implantations…”
In other words, Bitcoin ABC under Ver allegedly rented extra computing power to suppress the competing chain and become the chain’s dominant network.
And UnitedCorp alleges that Ver and Bitcoin ABC didn’t stop there.
They accuse Ver’s technologists of also, “…plant(ing) a ‘poison pill’ into the blockchain in the form of a ‘Deep Reorg Prevention’ …to cement the control of the…ledger…(and) control…future implementations… (and) upgrades.”
Ultimately, says Benoit Laliberte, President of UnitedCorp, the suit is brought in the name of ‘decentralization’:
“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.. (T)o maintain confidence in cryptocurrencies such as Bitcoin Cash, no person or entity can be allowed to control them.”