Coinbase users threaten to sue over lack of support for Bitcoin Cash



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Apr 2017
Lawsuits Brewing

The creation of the fork in Bitcoin's blockchain—the software ledger that permanently records all transactions—by a minority of bitcoin operators followed a period of bitter infighting in the Bitcoin community.

The details are esoteric (they center on the size and processing speed of the "blocks" on the blockchain), but the upshot is there are now two bitcoin blockchains, each with its own currency.

Upon the creation of the new chain, the breakaway faction chose to award Bitcoin Cash on a one-for-one ratio to every owner of bitcoin. So if a person owns five bitcoins, they are entitled to five units of Bitcoin Cash.

This scheme has been complicated, however, by the decision of the world's biggest bitcoin exchange, Coinbase, not to support Bitcoin Cash. For practical purposes, this means the millions of people who maintain a wallet on Coinbase did not receive the new "Bitcoin Cash" and, as of now, there is no way for them to do so.

Coinbase has clearly stated the company is not taking customers' Bitcoin Cash for themselves, but its decision to withhold the new currency has led one prominent legal scholar to suggest the company will be sued.

And, indeed, that now looks likely to transpire. An activist group, which claims Coinbase's decision is akin to a brokerage withholding new shares from its investors, warns it will commence a class action suit after August 15 if the company doesn't release the Bitcoin Cash.

Meanwhile, an attorney named Priyanka Ghosh-Murthy told Fortune she intends to file a complaint—invoking negligence, breach of fiduciary duty, and unjust enrichment—in Florida by the end of the week. Coinbase, which set out its decision on Bitcoin Cash in a July 27 blog post, did not immediately respond to a request for comment.

Source: Fortune

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