NY Court Dismisses Half of Class Action Plaintiffs’ “Baseless” Claims Against Tether and Bitfinex

NY Court Dismisses Half of Class Action Plaintiffs’ “Baseless” Claims Against Tether and Bitfinex

This week, Judge Katherine Polk Failla dismissed half of the class action plaintiffs’ claims that were filed about two years back against the cryptocurrency exchange Bitfinex and the sister company Tether, a stablecoin USDT issuer.

The Judge of the US District Court for the Southern District of New York issued a 127-page opinion regarding the dismissal of the complaint that included RICO claims as well, stated both Bitfenix and Tether on Wednesday.

As for the remaining claims, the court has raised substantial issues, making them “meritless.”

Bitfinex said,

“With half their case now dismissed, their primary expert debunked, and their lead law firm embroiled in its own internecine war – with its partners and former partners trading allegations of fraud and ethics violations – this case is doomed.”

It further said that they would not be settling the remaining of the “baseless” claims either as the litigation exposes the case to be a “clumsy attempt at a money grab, which recklessly harms the whole cryptocurrency ecosystem.”

In other news, on Thursday, the exchange halted trading for over two hours with its status page reading, “investigating issues with the platform.” The incident is now resolved after the company’s intervention.

Handling more than $715 million trading volume in the last 24 hours makes Bitfinex the world’s ninth-largest spot crypto exchange, as per CoinGecko.

The Fee Fiasco

Earlier this week, Bitfinex mistakenly paid $23.7 million in fees for sending $100,000. The transaction was made using a hardware wallet from DeversiFi, a non-custodial exchange that spun out of Bitfinex about two years back.

While, as we reported, the miner has given back $22.1 million, DeversiFi noted in its post mortem that it was due to underlying issues in the EthereumJS library coinciding with gas fee changes associated with the EIP-1559 upgrade in some transactions.

Combined with the fact that Ledger hardware wallet displayed fees in an unreadable manner,

“Only wallets with very large quantity of funds would be impacted, all other users would see a failed transaction.”

DeversiFi offered the miner to keep 50 ETH as a return fee. As for ensuring that it doesn’t happen again, the platform is working with the Ethereum community and Ledger to patch issues that may have contributed to this occurrence.

“On our platform we’ll be implementing stronger defensive measures when interfacing with external libraries, reviewing how we treat failed transactions and also enforcing a ceiling value for any max transaction fees as additional protection.”

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Author: AnTy

Crypto Custodian, Curv, Raises $26M Led By Commerzbank, Digital Currency Group, Coinbase Ventures

Crypto custody firm, Curv, which claims to enhance the multi-signature technology through a “secrecy computational model,” closed a $23 million Series A funding round. They will use the new capital to expand its business to global clients, improve its secrecy features, strengthen its technological infrastructure, and grow its team.

The funding was led by Digital Currency Group (DCG) and CommerzVentures, subsidiary of one of Germany’s leading banks, Commerzbank, which deals with the investments of the bank. Other participants in the round include Coinbase Ventures, Tokyo-based Digital Garage Lab Fund, and Team8, a cybersecurity firm headquartered in Israel.

Curv is a cryptography startup that raised $6.5 million in a seed funding round in 2018, launching its International Digital Wallet service providing users with security, independence, and flexibility in its digital asset storage. The firm uses the multi-party computation (MPC) cryptography system to keep funds safe.

MPC generates random private keys and shares them across a group of designated authorities instead of the multi-signature technology that secures the wallet through one fixed private key and hard computations.

On the significance of employing MPC over multi-signature technology, Curv CEO, Itay Malinger said,

“There is not any point in time or space where there will actually be a private key. MPC breaks that paradigm, so you don’t have additional layers of security like guards or cameras or World War II bunkers that can take 24 hours to get at.”

Real industry adoption

Curv is experiencing sustained growth in the number of clients, including top industry players such as Franklin Templeton (to secure and custody tokenized shares), trading platform eToro and trading desk, Genesis Trading, also owned by DCG. Itay declined to give too much on its future partners and customers but said Curv is speaking to several exchanges and institutional players on Wall Street.

The funding will also support tX, a group of engineers developing on Curv, to ensure the platform is ready for both crypto-focused and traditional financial institutions in the international markets.

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Author: Lujan Odera

People Will “Flock en Masse” to Bitcoin as Coronavirus Affects Gold Supply: Max Keiser

Thursday packed a punch after jobless claims soared to 6.6 million after previous week’s over 3 million Americans filed for unemployment. A total of nearly 10 million jobs have vanished in just two weeks as the coronavirus pandemic shuttering business forces vast layoffs.

The speed and scale of such losses are unprecedented, “What usually takes months or quarters to happen in a recession is happening in a matter of weeks,” said Michelle Meyer, chief U.S. economist for Bank of America Merrill Lynch.

US stocks edged higher on soaring jobless claims along with oil prices with Brent Crude up 6% after President Trump said he believes Russia and Saudi Arabia can de-escalate their oil price war.

Gold also jumped after opening lower on a firm dollar on Thursday. Spot gold was up 0.9% to $1,605.60 per ounce. Saxo Bank analyst, Ole Hansen said,

“Both bulls and bears can build a narrative in gold right now, with low inflation, weak physical demand from key buyers and the dollar’s strength for the bears and the economic shock, negative real yields and cenbank easing for bulls.”

Gold-god’s money or Bitcoin-people’s money?

According to ‘Rich Dad Poor Dad’ author Robert Kiyosaki, gold and bitcoin is the option to go for when the Fed is printing money.

However, Bitcoin proponent Max Keiser believes, people will “flock en masse” to bitcoin because there would be no gold for sale due to coronavirus. He said,

“I predict — and this is not only the ultimate use case but the ultimate irony — that once people realize that they cannot get gold, they’ll start flocking en masse into Bitcoin.”

As we reported, due to an increase in demand gold has been facing “unprecedented turmoil” as coronavirus shuts down supply sources.

In Q1 of 2020, while bitcoin was down 11.49%, gold ended the first three months with a positive 4% returns. Bitcoin is currently up 10% jumping to $6,850.

Source: Skew

The world’s leading cryptocurrency has also halvening coming in just over a month which Bitcoin proponents have taken to call “‘quantitative-hardening’ program,” unlike central banks’ unpredictable inflation and money creation. Adam Back, founder and CEO of Blockstream explained,

“Bitcoin quantitative hardening is the sound of bitcoin getting even harder. All while the world loses its fiat mind and plummets into quantitative easing infinity.”

Bitcoin used as an intermediary currency

In other news, unlike gold, Bitcoin is “primarily being used as a vehicle currency across Latin America,” stated Matt Ahlborg, a data scientist at dlab.vc.

As per his research, bitcoin is used as an intermediary currency between fiat currencies to transfer value in and out of Venezuela. The country with hyperinflation doesn’t allow for its currency to be freely exchanged with other currencies, as such,

“remitters and anyone else wishing to transfer value into or out of Venezuela are best served by using the vast network of informal money transmitters available to them.”

In 2019, LocalBitcoins facilitated the trade of $315 million dollar worth of bolivars but it was “a very small fraction of the total of Venezuela-related money transfers that ride Bitcoin rails.”

Bitcoin could actually be facilitating billions of dollars worth of censorship-resistant value transfer to and from Venezuela over the last few years and playing a part in “changing the destiny of an entire country,” said Ahlborg.

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Author: AnTy

Zabo Raises $2.5M From Moonshots Capital, Tezos To Bring Crypto Into The Mainstream

The crypto software company Zabo, which claims to directly connect bank accounts and crypto wallets, has just raised $2.5 million in funding so that it can start adding new customers and building its engineering team.

Based in Dallas, Zabo announced on Thursday that its funding round is complete and that it hosted participants like the Tezos Foundation, Digital Currency Group (DCG), Castle Island Ventures and CoinShares. Moonshots Capital led the round and is known as an early-stage investor that also led the funding for the Slack messaging platform.

Zabo Connects Bank Accounts to Crypto Wallets

Zabo claims it can directly connect bank accounts to crypto wallets by using code. The software company will use the new funding to improve its engineering capabilities and to gain more customers. It claims its technology went through tests and has been used with many apps, personal finance management tools, tax software and decentralized finance platforms included. Here’s what the general partner of Moonshots Capital, Craig Cummings, had to say about Zabo:

“[Zabo] built an incredibly important piece of technical infrastructure that will enable cryptocurrency financial services to touch billions of people.”

The Process that Connects Banks and Wallets Simplified

The co-founder of Zabo, Christopher Brown, made a statement in which he says his company’s success has grown as a result of the simplified solution for connecting banks and wallets it offers. It’s a well-known fact that many of the other attempts of connecting crypto to traditional finance are technologically complicated, so Brown says that:

“Zabo solves this by dramatically reducing the complexity. We enable leading financial services companies to swiftly and easily integrate into hundreds of leading cryptocurrency wallets with just a few lines of code.”

Another $1 Million From Ken Seiff’s Blockchange Ventures in 2018

The other co-founder and Zabo’s president, Alex Treece, said his company helps traditional financial entities deal with cryptocurrencies, making it possible for more compelling products to be built, in order for the new generation of clients to be served. The software startup has also raised $1 million from Ken Seiff’s Blockchange Ventures in a pre-seed round from 2018.

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Author: Oana Ularu

Brazil Central Bank To Roll Out PIX, A Non-Crypto, QR-Based ‘Near Instant’ Payment System

Brazil’s Central Bank is set to launch a new payment system which it claims will offer near instant fund transfers. The new payment system is set to be released in November, Cointelegraph reports.

The new system will be referred to as PIX, a short form for Brazil’s Instant Payment Scheme. The platform will allow for peer-to-peer as well as business-to-business (B2B) transfers within 10 seconds through mobile phones, selected ATMs and internet banking.

In a press statement released on Feb. 20, all payment and financial institutions that are regulated by Brazil’s Central Bank are mandated to give out the requisite functionalities to their active clients for smooth facilitation of the PIX transfers. The press statement also indicates that QR Codes will be used for execution of transactions. Users can also use identification details like taxpayer identification number, phone number or email.

An Answer To Cryptos

Cointelegraph reports that the head of the central bank Roberto Campos explained that the new platform is set to directly compete with payment systems that are based on distributed ledger. He stated that the idea behind the creation of PIX was necessitated by the desire to have a payment platform that is secure, transparent, cheap and fast. He added that the new system is set to have characteristics as those of Bitcoin and other cryptos.

Campos also stated that the PIX platform will be the central bank’s top priority this year. He went ahead to state that the platform will be instrumental in eliminating the need for individuals to always have physical currencies which leads to a high cost for the society.

The statement also states that the central bank and Brazil’s Treasury Secretariat have already inked a deal which will allow Brazilians to remit their federal taxes through PIX starting from November this year. In addition, the Brazilian government is set to provide various payments like income tax refunds, grants, social benefits via PIX in the near future. The aim is to enhance mass adoption of the platform.

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Author: Joseph Kibe

Craig Wright Claims ‘Attorney Privilege’ In Tulip Trust Case On 11,000 Crucial Documents

  • Kleiman vs Wright case took a new turn as Craig Wright, “Faketoshi”, claims attorney-client privilege.
  • The defendant has claimed attorney privilege over 11,000 documents released to him by a third party.
  • Kleiman’s lawyers claim abuse of privilege by Craig Wright in settling the $10 billion USD lawsuit.

The prolonged Kleiman vs Wright case has taken yet another turn as the defendant raised a plight of attorney-client privilege after failing to provide the alleged bonded courier. Craig Wright (defendant), self-proclaimed “Satoshi”, stated in court earlier this year, that he had received a bonded courier with over 11,000 Bitcoin addresses from a third party. However, when the court ordered him to produce the documents, Craig’s legal team is claiming attorney-client privilege on the documents.

Furthermore, the defendant claims the bonded courier is a lawyer hence no information can be shared in court yet. This back-and-forth from Craig’s camp has seen the Kleiman estate file for abuse of privilege by the defendant. The statement from Kleiman’s counsel read,

“Craig [Wright] has improperly withheld documents as privileged.”

Wright told the courts multiple times that he was awaiting a bonded courier to arrive in early January with the documents that will help him access the encrypted files. The files would then offer access to the 1.1 million Bitcoins (~$10 billion dollars) in the wallet. This is known as the Tulip Trust, which is largely controlled by Wright.

Since expiration of the court deadline to produce the files, Craig has been on the edge with the latest court hearing on February 3rd, witnessing “Faketoshi” claiming attorney privilege.

Craig used 18 companies listed by the Kleiman’s counsel to claim privilege. The lawyers released a statement reporting,

“Based on that investigation, plaintiffs [has] determined that all but two companies and Nchain have already ceased to exist; and those two are in the process of being liquidated by an external administrator in Australia.”

Notwithstanding, the self-proclaimed founder of Bitcoin, further claimed privilege on the bonded courier that brought the 11,000 files saying the courier is a lawyer. This means the lawyer cannot testify in court on the matter with the lawyer’s communication privileged.

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Author: Lujan Odera

United American Corp Fights Lawsuit Dismissal Against Crypto Mining Giant Bitmain

In a recent report, the United Corp claims the courts should not dismiss Bitmain from the U.S. antitrust suit, as Bitmain had asked. However, Bitmain is insisting that the court should wave off the case because the crypto company had missed a deadline to serve its claim against Bitmain.

After Bitmain’s request to the court, United Corp replied by denying the claims made by Bitmain. It claimed that Jihan Wu, Bitmain’s CEO, already knew about the suit against the company.

United Corp Disagrees With Bitmain

On the 12th of this month, Bitmain filed a motion against United Corp and asked the court to dismiss the lawsuit against them because United Corp missed the deadline by four days. According to Bitmain, they were not notified of the suit and should not be forced to honor a notification when they were not aware it.

Bitmain also said that its company does not have a strong link in the United States to be able to face a jury there. However, United Corp disagreed with Bitmain’s claim by pointing out that Jihan Wu, Bitman’s CEO, lives in San Francisco, presently.

Additionally, United Corp claimed to show that there are strong ties between The US and Bitmain. They believe there is enough proof to dismiss Bitmain’s claim stating otherwise.

United Corp Determined To Carry On With The Lawsuit

United Corp demonstrated its readiness to bring evidence to that effect by pointing out that Bitmain recently filed for an IPO in the US. Also, United Corp said Bitmain and its CEO share the same counsel with other related entities in the US.

The Crypto firm also has more evidence to prove Bitmain is wrong by sharing Bitmain’s entire historical business dealings in the United States.

Furthermore, the company said that Bitmain recently invested in a data center firm that’s based in Texas in a deal worth hundreds of millions of dollars. United Corps concluded that Bitmain’s claim of having no ties in the US does not have any basis.

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Author: Ali Raza

Federal Court Lawsuit Says Money From Stox Token Sale Was Used To Buy Soccer Team

A new federal court lawsuit against Stox Technologies in Seattle claims that the proceeds from the token sale of Stox tokens were used to buy a soccer team from Israel and other outside investments. This would be a clear breach of the law, as the money should be used on the project instead.

The lawsuit claims that the execs from Stox Technologies defrauded its investors by lying and using the money in non-related activities. The plaintiff claims that the tokens were purchased reliant on statements that affirmed that the money would be used to develop the project, but they were not used for that.

Investors from all over the world were allegedly defrauded out of millions of dollars in this case, as a very high amount of money was raised.

Moshe Hogeg, the owner of Stox Technologies, is being accused of funding several expensive purchases with the money, including paying around $19 million USD to buy land in the capital of Israel, Tel Aviv, and $7.2 million to pay for Beitar Jerusalem, a local soccer team.

Will this lawsuit hurt Stox Technologies? The Block seems to think so. In a recent article, an analyst from the crypto media outlet affirmed that there is “a lot of smoke” in the lawsuit, but that pleading problems aside, there is a chance that the plaintiff may win the case against the company because it has “an angle”.

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Author: James W

Bitfinex, Tether File A Motion to Dismiss NYAG’s ‘Frivolous’ $1.4 Trillion Class Action Lawsuit

  • Tether states that the claims against their platform by the plaintiff are “frivolous.”
  • The letter states that the causes of action states in the lawsuit don’t have the requirements to be considered.

Tether has been involved in a lawsuit recently in the U.S. District Court in the Southern District of New York, but the company clearly doesn’t want this lawsuit to go through. According to a press release on the official website, Tether explains that it has filed a motion to dismiss the class-action lawsuit, calling it “frivolous.” Furthermore, Tether explained, “The motion will allege that many of Plaintiffs’ causes of action lack the required legal basis to proceed past the very early stage of the case.”

There are multiple accusations that Tether makes against the claims, cautioning consumers to examine the statements of the Plaintiffs’ “with a jaundiced eye.” One of the first issues brought up is that the accusations primarily stem from “an unpublished academic paper,” which was written by Amin Shams and John M. Griffin. Adding that there are already several flaws in the paper, Tether points out that the document was recently edited in an effort “to walk back support for a core allegation of the Plaintiff’s’ complaint.”

The platform adds that the complaint doesn’t consider other factors that may have been part of Bitcoin’s spike in price in 2017 and that the plaintiff accuses Tether of “manipulating a market more than seven hundred times the side of total Tether USDT issuances in circulation” for the better part of that year. Aggressively, the platform tells consumers that this type of relationship between the numbers would typically be considered by “any sophisticated and rational observer of the digital token ecosystem.”

Now, Tether’s focus seems to be on (what they consider to be) “true facts” in court, adding that the Plaintiffs are undermining the proceedings and the consumers involved with the cryptocurrency industry. Going forward, the platform announced that it plans to “vigorously contest” the claims against them and defend their side of this narrative, along with the customers and stakeholders both within and outside of their community.

The text of the pre-motion letter to the court can be viewed below,

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Author: Krystle M

Peter Schiff to Max Keiser: Bullish for Gold, Bearish for Bitcoin if China Launches Gold-Backed Crypto

A gold bug veteran Peter Schiff claims that if China decides to launch a digital coin it would not be good for bitcoin. Schiff is well known for his notorious negativity regarding anything bitcoin.

Peter Schiff tells Keiser that Gold betas bitcoin

Schiff thought that the reporter Keiser referred to him as an idiot since Schiff thought gold is a better currency than bitcoin.

He also repeated his usual remark on bitcoin showing that bitcoin lacks intrinsic value. His usual remarks that Keiser has claims that China will launch a cryptocurrency backed by gold. In his statement, Schiff thinks that if that happens, it would be bullish for gold and bearish for bitcoin. Schiff also adds that a crypto backed is better than the one backed by nothing.

Keiser, however, has not responded publicly to Schiff’s remarks rarely seen on social media sites lately.

Hints on gold role

Cointelegraph has reported that China is making efforts to create the DCEP currency in the rise of Facebook’s token known as Lira.

This backing is rocky with an ex-congress official saying that DCEP would dip into the country’s gold reserve, along with other factors. However, the endorsement of China’s blockchain technology had a positive effect on blockchain markets. This endorsement did not matter since local media has advised citizens not to count on the support as a proof regarding blockchain.

Beijing, on the other hand, outlawed blockchain activities in 2017 despite the rumors that there are some investors using different platforms to gain access.

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Author: BEG News Desk