Mining Firm Sues Roger Ver, Bitmain and More for 'Hijacking' Bitcoin Cash

Published on by Coindesk | Published on

A new lawsuit alleges that proponents of Bitcoin Cash ABC - one of two competing iterations of the bitcoin cash cryptocurrency that split off during a hard fork last month - illegally manipulated the market, damaging investors as a result.

Florida-based United Investment Corp. filed a federal lawsuit in the U.S. District Court, Southern District of Florida claiming that Roger Ver, bitcoin.com, Bitmain and co-founder Jihan Wu, crypto exchange Kraken and founder Jesse Powell, and Bitcoin ABC developers Amaury Sechet, Shammah Chancellor and Jason Cox centralized bitcoin cash and manipulated the price during its contentious hard fork.

The suit claims that bitcoin.com and Bitmain "Hijacked the blockchain," especially by dedicating mining power in theory assigned to mining the bitcoin blockchain to mining what was then referred to as the Bitcoin ABC chain.

UnitedCorp claims that it "Justifiably relied on Defendants' misrepresentations by investing millions of dollars in development and deployment of infrastructure specifically for the mining of bitcoin cash," and has suffered damages as a result.

The company claims similar damages from the role Bitcoin ABC developers played in setting up a checkpoint on the network, claiming that doing so "Violated the ground rules of the network that other users had relied on and respected for years, and artificially pumped up the chain implementation with computer hashes to dominate the temporary software upgrade."

In an email, Sechet told CoinDesk that Bitcoin ABC did not centralize the network, adding, "In fact I explained that the result of the actions being taken by various actors in the ecosystem would result in centralization."

Finally, the suit alleges that Jesse Powell and Kraken impacted the price by designating the Bitcoin ABC chain as bitcoin cash, and granting it the "BCH" ticker.

When reached for comment, Powell noted that he had not yet seen the complaint, but asked, "Why would we change the ticker for bitcoin cash?".

The defendants colluded to take control of bitcoin cash, the lawsuit claims.

"Plaintiff seeks an injunction: precluding Amaury Sechet, Shammah Chancellor, and Jason Cox via Bitcoin ABC from continuing to implement checkpoints on the Bitcoin Cash network and any other implementation of the software that would prevent the resulting chains from being able to be re-merged; and requiring them to return the blockchain to its previously decentralized form with the previous consensus rules."

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