Bitfinex has come out fighting after weeks of being on the backfoot. The bitcoin exchange, which has parried stinging accusations from the anonymous critic Bitfinex’ed, has had enough and called in the high-priced lawyers. Steptoe & Johnson is the company tasked with tracking down anyone perceived to have libeled the Hong Kong-based exchange – and it’s got one particular Twitter account firmly in its sights.
Bitfinex v Bitfinex’ed
Amidst mounting questions as to the solvency of Bitfinex and accusations of wash trading using tethers – tokens pegged against the U.S. dollar – the twittersphere has had a field day. Much of the speculation has been spearheaded by Bitfinex’ed, an account which has been a constant thorn in the side of the world’s largest bitcoin exchange.
It’s now been suggested by Bitfinex – and confirmed by its nemesis – that Bitfinex’ed is facing a lawsuit. Stuart Hoegner, legal counsel for Bitfinex, released a statement saying:
To date, every claim made by these bad actors has been patently false and made simply to agitate the cryptocurrency ecosystem. As a result, Bitfinex has decided to assert all of its legal rights and remedies against these agitators and their associates.
This was followed up with a PR blitz in which one of the exchange’s partners posted an op-ed conceding that Bitfinex has been poor at communication. The piece makes comparisons between the cannabis and cryptocurrency industries in terms of the difficulty of obtaining banking arrangements, before taking aim at Bitfinex’ed, stating, perhaps disingenuously:
An anonymous online Twitter user who throws allegations around without ever revealing his or her own identity. As a communications professional myself, I know that whenever someone tosses allegations and attacks behind the veil of anonymity, one has to examine their motives.
There are very valid reasons why an individual such as Bitfinex’ed may wish to preserve their anonymity. Nevertheless, regardless of the merits of both parties’ case, the fact is that the gloves are now off. In its statement announcing the hiring of Steptoe & Johnson, Bitfinex said: “In recent months, certain parties and their associates have made false and unsubstantiated claims against Bitfinex, engaging in potential market manipulation activity that is dishonest and unlawful.”
Readers who have been following the long-running spat will be aware that these are the very same accusations that Bitfinex’ed has leveled against Bitfinex.
So What Happens Now?
In all likelihood, the case will never come to pass for a variety of reasons. Libel or slander cases are notoriously difficult to prove, especially when the alleged defamatory comments were made on a platform such as Twitter which is largely protected by free speech amendments. Even if Bitfinex were to successfully take its nemesis to court, it would need to lay bare its own operations to prove the accusations to be false.
The company also has nack for filing and then retracting lawsuits, having done similar against Wells Fargo earlier this year. Some commenters see the hiring of Steptoe & Johnson as evidence of Bitfinex trying to deter mainstream media outlets – which have greater legal obligations than anonymous social media commenters – from investigating its dealings.
There is a case for saying that the lawsuit – regardless of whether it transpires – suits both parties. Bitfinex can silence future dissenters who may be tempted to emulate Bitfinex’ed and start slinging mud. Bitfinex’ed, in return, can portray itself as the victim of a witch hunt whilst boosting its bitcoin balance. Regardless of how this case plays out, one thing that seems further away than ever is the truth. Until Bitfinex publishes the long-overdue audit of its accounts, speculation will continue.
Do you think Bitfinex will follow through with their supposed lawsuit against Bitfinex’ed? Let us know in the comments section below.
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