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 (and their respective founders) “hijacked the [bitcoin cash] 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.
In a separate statement sent to CoinDesk, UnitedCorp said the defendants perpetrated “a scheme of fraud” by colluding to control the network.
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.
Further, the suit claims that “Bitmain, Bitcoin.com, and Ver have been unjustly [enriched] by the conduct described above.”
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.”
This checkpoint also centralized the market,