Lawyers who successfully sued Craig Wright for billions of dollars in bitcoin are going after crypto exchange Bitfinex and its affiliated dollar-backed stablecoin Tether – both already facing existing legal claims.
Kyle Roche and Velvel Freedman filed a class-action lawsuit in the Southern District of New York alleging more than $1.4 trillion in damages suffered by plaintiffs David Leibowitz, Jason Leibowitz, Benjamin Leibowitz, Aaron Leibowitz, Pinchas Coldshtein and “all other similarly situated”.
The lawsuit claims that iFinex – the parent company of Bitfinex – BFXNA Inc, BFXWW Inc, Tether Holdings Ltd, Tether Operations Ltd, Tether Ltd, Tether International Ltd and a number of related individuals used cryptocurrency to “defraud investors, manipulate markets, and conceal illicit proceeds”. The claim continued:
Part-fraud, part-pump-and-dump, and part-money laundering, the scheme was primarily accomplished through two enterprises — Bitfinex and Tether — that commingled their corporate identities and customer funds while concealing their extensive cooperation in a way that enabled them to manipulate the cryptocurrency market with unprecedented effectiveness.
Tether Anticipates Action
Tether appeared to anticipate news of further lawsuits against it. Just two days earlier in a blog post dated October 5, Tether – citing an unpublished research paper accusing it of market manipulation and fraud – said it expected “mercenary lawyers” to exploit the “deeply flawed paper” as evidence in the ongoing lawsuit.
Indeed, it appears that Roche and Freedman have used this paper as the background for the lawsuit, as point 13 of their filing to the New York District Court refers to Tether’s October 5 statement. It read:
Fully aware of the incredible harm they’ve inflicted on the cryptocurrency market, on October 5, 2019, Bitfinex and Tether published statements where they generally described the allegations contained herein, admitted that they ‘fully expect’ to be sued, and stated that they ‘would not be surprised if just such a lawsuit will be filed imminently’.
The filing concluded that calculating the damages at this stage would be premature, but added:
There is little doubt that the scale of harm wrought by the Defendants is unprecedented. Their liability to the putative class likely surpasses $1.4 trillion US dollars.
Roche and Freedman were the principal lawyers acting on behalf of the Kleiman estate versus Craig Wright, the bitcoin investor and self-proclaimed to be bitcoin inventor Satoshi Nakamoto, winning a claim that is likely to be worth several billion dollars.
It was revealed in the summer that the ongoing legal battle both Tether and Bitfinex face against the New York Attorney General over claims Tether’s dollar reserves were used by Bitfinex to plug a funding gap, has already cost the firms more than half a million dollars.
China’s Government Looks Into A Blockchain Development Fund
National People’s Congress, China’s parliament, and the Chinese People’s Political Consultative Conference, the most powerful political advisory body in the country, have recently begun their annual sessions. These are widely referred to as the “Two Sessions” or “lianghui” meetings. These meetings have been ongoing since May 22. The National People’s Congress, or NPC, is China’s top legislative body. Nearly 3,000 delegates from around the country meet once a year to submit proposals during the meetings.
According to a Beijing News report on May 23, Jieqing Tan, deputy to the NPC, suggested setting up a special fund for blockchain industry development. If accepted, this fund would be led by the government. The aim of the fund is to support the development and growth of a number of promising blockchain enterprises, encourage blockchain technology innovation, and cultivate a number of unicorn enterprises in the blockchain space, says Tan.
By supporting the development of the blockchain industry, Tan believes it will “modernize” the country’s governance system. Blockchain technology not only will be a great tool to push China towards smart governance and a high-trust society, but it can also help China to gain an upper hand globally in the future development of the technology, according to Tan. He thinks by taking this technology innovation lead, China will be able to better protect its sovereignty and national security. Tan suggested that a clear national blockchain industry development plan should be defined. He explained that:
“From the bottom technology standard, middle industry application development to the top-level system design, the national blockchain technology, industry, and supervision three-dimensional strategic planning system should be well coordinated.”
The new economic potential and new job opportunities derived from blockchain technology are huge. However Tan pointed out that currently the number of limited blockchain enterprises, its scalability, and lack of talent and information have been the main problems preventing the blockchain ecosystem from developing a well-established ecosystem.
Is Crypto Growing In Africa?
Crypto adoption is making significant advances in Africa, with crypto ownership, trade volume, and regulation all moving toward greater adoption. A recent report by Arcane Research and Luno found that Uganda, Nigeria, South Africa, Ghana, and Kenya are frequently among the top 10 countries by Google searches for the word “Bitcoin.” The report describes the continent as “one of, if not the most promising region for the adoption of cryptocurrencies,” emphasizing Africa’s combination of low existing crypto adoption alongside an “enormous” domain possibility. The firms emphasize that Africa exhibits a young population, frequent monetary crises and currency failures, large unbanked or underbanked populations, and expensive means of payment.
While Nigeria has long dominated the continent’s trade volume, the report found that South Africa has the highest percent of cryptocurrency ownership or use among internet users in Africa with 13%, followed by Nigeria with 11%. Worldwide, South Africa ranks fifth for crypto adoption among connected citizens. This past week saw South Africa post its second-strongest weekly volume on peer-to-peer Bitcoin (BTC) marketplace Localbitcoins, with nearly $1.65 million worth of BTC changing hands.
The surge in trade activity saw total P2P volume for South African trade edge out Kenya last week with $1.95 million in trade across Localbitcoins and Paxful. Last month, South Africa’s financial regulator issued a policy document asserting that crypto-assets and activities relating to virtual currencies “can no longer remain outside of the regulatory perimeter.”
Nigerian P2P trade is rallying to record highs, producing $9.2 million in combined weekly trade. Kenyan trade has also seen a recent spike, with Localbitcoins trade between BTC and the Kenyan shilling producing its second-strongest week on record for the third consecutive time. Morocco and Egypt have also posted record trade activity in recent weeks. The increase in volume across the continent has also seen P2P volume from Sub Saharan Africa beat out Latin America for the first time.
Blockchain May Play A Huge Role In VR-Powered Social Media
Virtual reality media platform, Sensorium, has announced its membership in the Global Blockchain Business Council, or GBBC — a Swiss-based non-profit industry association for blockchain. Sensorium will participate in GBBC’s upcoming virtual forum on May 28, which will see the firm’s director of technology Alex Blagirev discuss his predictions for how virtual social media will change the way that people interact online.
A GBBC representative stated that the convergence of VR and social media is already beginning to gain momentum, noting that major platforms such as Facebook “are providing users with new ways to share and experience content.” “Within this context, blockchain technology will likely play an important role in the creation of digital assets and an online virtual economy,” the representative stated. “Furthermore, blockchain technology could be used to protect ownership and copyright, as well as create new models of advertising in virtual worlds, much as it is already doing in the real world.”
Sensorium’s CCO, Brian Kean, emphasized the security benefits offered by distributed ledger technology, or DLT, stating:
“Identity theft, fake accounts, etc. all will be to a large extent eliminated as human participants in the socially-virtual world will be required to verify their identity via the blockchain.”
Kean also revealed that blockchain will also be used to “facilitate payment for created, third-party content.”
As a GBBC member, Sensorium will participate in a range of GBBC activities aimed at “advancing adoption of blockchain technology and educating regulators, policymakers, and business leaders on the benefits of the technology.” The two entities first began formally working together at the GBBC’s flagship event, Blockchain Central Davos, where Sensorium participated. “We closed out the evening with a special demo of Sensorium’s VR platform and a performance by GBBC Arts and Music Ambassador and Former Drummer for Guns N’ Roses, Matt Sorum,” added the GBBC spokesperson.
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