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Veritaseum
File a complaint against Circle
In patent litigation

One of the first patent cases involving cryptocurrencies is pending in federal court in Texas.

Cryptocurrency firm Veritaseum Capital for follow-up Circle Internet Financial Ltd for alleged infringement of its digital asset trading patent.

Veritaseum’s website says the company is “building blockchain-based peer-to-peer capital markets as software on a global scale.”

As the World Intellectual Property Review Explain,

Veritaseum’s software enables blockchain-based peer-to-peer capital market transactions such as crypto payments, trading, or “staking” (a method of earning rewards for holding certain crypto- currencies).

The 2021 patent in question is for

Devices, systems and methods enabling parties with little or no trust in each other to enter into and enforce value transfer agreements conditional on the contribution or participation of a third party, over arbitrary distances , without special technical knowledge of the underlying transfer mechanism(s), potentially allowing for the involvement of third-party mediators, substitution of transferors and transferees, term substitution, review or reform, etc.

Veritaseum is seeking at least $350 million in damages. As Reuters reported, the company sued earlier Coinbase for allegedly infringing the same patent. Coinbase decided to dismiss the complaint.

As Reuters notes,

Veritaseum formerly issued the VERI token. In 2019, its founder Reggie Middleton and two Veritaseum entities paid the United States Securities and Exchange Commission more than $9.4 million to settle charges of a “fraudulent scheme” to sell the token.

The SEC had accused them of misleading investors about the demand for the tokens and manipulating their price. They settled the case without admitting or denying the charges.

Boston-based Circle sells a stablecoin called USDC. As Investopedia Explain,

Stablecoins are cryptocurrencies whose value is ankle, or linked to that of another currency, commodity or financial instrument. Stablecoins aim to provide an alternative to the high volatility of the most popular cryptocurrencies, including Bitcoin (BTC), which made crypto investments less suitable for everyday transactions.

However, “stable” coins are not necessarily stable.

As the Washington Post reported, in May 2022, a stablecoin called TerraUSD, algorithmically designed to be pegged to the dollar – crushed.

As the Job Remarks,

The total value of global cryptocurrencies tracked by data firm CoinMarketCap is now around $850 billion, up from $3 trillion a year ago. The average value of cryptocurrency exchanges per day fell from $131 billion in May to $57 billion in December – a drop of more than half…

This lawsuit is just the latest challenge for the crypto industry, which is suffering from what some have called “crypto winter.”

As the Washington Post reports,

A year ago, the crypto world was booming, with Bitcoin and Ethereum prices at all-time highs, celebrities tripping over each other to promote expensive digital artand the logos of blockchain companies adorning sports stadiums and Super Bowl commercials.

That era is over.

Over the past year, cryptocurrency prices have more than halved, trading volume has plummeted, and several top companies have collapsed in liquidity crises. The arrest last week in the Bahamas of Sam Bankman-Friedthe former CEO of what was until very recently one of the largest and most respected cryptocurrency exchanges in the world, has only deepened the sentiment that the crypto bubble has definitely burst, taking with it billions of dollars of investments made by ordinary people, pension funds, venture capitalists and traditional businesses.

Experts wonder if this is just a cyclical downturn, like a bear market on Wall Street, or if it’s more of an ice age.

The patent case is Veritaseum Capital LLC v. Circle Internet Financial Ltd, US District Court for the Eastern District of Texas, No. 2:22-cv-00498.


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