2018, The Year Of The Bitcoin... Lawsuit

2018 has seen a huge surge in the popularity of cryptocurrency. Led by the price surge at the end of 2017 and the start of 2018, cryptocurrency has become more popular than ever. Granted, at the minute investment may be a little quiet, however the name of Bitcoin and many other cryptocurrencies now features within mainstream news. Bitcoin is certainly a topic of discussion and is now a cultural icon understood by many people, young and old, the tech savvy and the technophobic. It is however important to remember that with a surge in popularity, will come a surge in backlash, a surge in problems and a surge in negativity. Simply put, the bigger something gets, the more problems it attracts. It’s Newton’s third law, for every action there is an equal and an opposite reaction. As Bitcoin surges in popularity, more people will find holes in it and more people will resist it. Lawsuits are a prime example of this, and it’s not just a plague on Bitcoin either, XRP for example is one cryptocurrency that is run down by lawsuits and legal proceedings. The National Naw Journal, a United States based legal research journal have published research that shows how a surge in the popularity of Bitcoin and cryptocurrency has been met by a huge surge in the occurrence of cryptocurrency and Bitcoin based lawsuits in the United States. Image sourced from The National Law Journal As you can see from the graph produced by the research, there has been a huge surge in the occurrence of Bitcoin lawsuits from Q1 2017, with the number of lawsuits peaking in Q2 2018. This is expected to rise through Q3 and the end of 2018 too, with occurrences no doubt going up as we enter 2019 too. Okay, so 23 lawsuits, as recorded in Q2 2018 isn’t a huge deal, though when you compare it to just 2 recorded lawsuits a year earlier in Q2 2018, the significance of this becomes very clear indeed. According to ICO Examiner however, a number of these lawsuits could have come as a result of a rise in the popularity of Initial Coin Offerings (ICOs) and not just as a result of the organic increase in the popularity of Bitcoin: “The numbers compiled by the NLJ are modest in absolute terms but do appear to show a striking increase in relative terms. In Q2 of 2017, only two cases of cryptocurrency-related lawsuits had been recorded, but that number rose to 23 for the corresponding period in 2018.  The research has been compiled by law firm Lex Machina who appear to have derived their statistics from a string search of the terms ‘cryptocurrencies’, ‘blockchain’ or ‘bitcoin’ in litigation filings, and are likely to align with the exponential increase in numbers of ICOs that has been occurring over the last eighteen months.” Either way, it’s very clear that cryptocurrency and Bitcoin based lawsuits are on the rise, alongside the general rise in the popularity of Bitcoin and cryptocurrency. This is an inevitable part of the growth that our community is currently seeing. This time next year, it’ll be interesting to see just how many lawsuits exist that use the word cryptocurrency or Bitcoin. One thing is certain, I can bet it’s going to be a much bigger number than 23. References The National Law Journal ICO Examiner