Bitfinex has hired the law firm of Steptoe & Johnson and is threatening legal action against a pseudonymous blogger who it says have made false claims about the bitcoin exchange.
In a statement, Bitfinex said it hired Steptoe to respond to such claims with "appropriate action," including "possible litigation" against "various parties." Jason Weinstein, who leads the blockchain practice at Steptoe, confirmed its hiring by Bitfinex in an email.
Stuart Hoegner, the in-house counsel for Bitfinex, said in the statement:
The move aligns the world's largest bitcoin exchange – a company mired in controversy and shrouded in secrecy – with one of the most prominent law firms in the digital currency space.
Based in Washington, D.C., Steptoe is the counsel for the Blockchain Alliance, a public-private forum created two years ago to exchange information between the industry and law enforcement in the service of fighting crime.
Litany of claims
Stepping back, Bitfinex, incorporated in the British Virgin Isles, has close ties to Tether, the Hong Kong-based issuer of a dollar-pegged cryptocurrency. While Tether says it fully backs its eponymous tokens, Bitfinex'ed has accused the company of issuing more tethers than it can redeem and using them to fund margin trading on Bitfinex, thereby artificially pumping up the price of bitcoin.
In its statement, Bitfinex did not specify who exactly it might sue, on what grounds, or in which jurisdiction.
"I think you can infer who," said Ronn Torossian, the public relations specialist recently hired to represent Bitfinex and Tether.
Further, the Bitfinex statement goes on to suggest that those making the assertions might be engaging in "market manipulation" – broadly, the same thing Bitfinex'ed accused the company of.
"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," Bitfinex said.
Correction: This report has been updated to reflect that Bitfinex withdrew its lawsuit against Wells Fargo in April, not August.
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