Stablecoin issuer Tether and cryptocurrency exchange Bitfinex have been caught up in an amended class action lawsuit. Both firms are currently facing allegations bordering on market manipulation.
Recent Tether And Bitfinex Case Comes With 3 Cause Actions
In a recent filing with the United States District Court Southern District of New York, Tether and Bitfinex were accused of market manipulation and violation of antitrust laws. To put it in perspective, the two crypto companies are accused of violating the Commodities Exchange Act (CEA) via market manipulation, monopolization, and agreement in restraint of trade.
The lawsuit was brought upon them by Matthew Script, Benjamin Leibowitz, Jason Leibowitz, Aaron Leibowitz, and Pinchas Goldshtein, who were all named “Plaintiffs” in the suit. The latest filing is a new, slimmed-down second complaint that is part of an ongoing class action lawsuit.
As seen in the filing, Tether and its sister crypto exchange “executed a sophisticated scheme to fraudulently inflate the price of crypto commodities, a class of crypto-assets that includes bitcoin.” Tether allegedly achieved this by pushing its USD-backed stablecoin USDT into the crypto market while not fully backed.
By doing this, it created the illusion of increased cryptocurrency demand in the market. Thereby, “facilitating trading of [cryptocurrencies] on credit and loaned funds” and ultimately driving up crypto prices. This follows two initial legal complaints
filed in the same case; the first one was in 2019 and an amended crypto lawsuit followed the next year. They were both overseen by U.S. District Judge Katherine Polk Failla.
While the first compliant contained eight causes of action, the amended copy held twelve causes of actions. This further confirming that the most recent iteration is a slimmed version.
Original Counsel Removed in Tether Suit
Overall, this particular lawsuit has faced several drawbacks in the past. These includes the removal of crypto law firm Roche Freedman originally representing the plaintiffs.
The removal comes off as necessary after unsavory video recordings of cryptocurrency lawyer Kyle Roche leaked. Roche doubles as the founder of the law firm made it way to the public two years ago. Precisely, Roche was seen admitting to filing frivolous lawsuits to help his clients win cases in these videos. This tested how genuine he was as a supposed law upholder.
Meanwhile, the latest suit claims that there are chat and deposition logs from the companies’ operators, allegedly admitting to manipulative actions.
Notably, a Tether spokesperson has made it clear that the claims in the second amended complaint has no merit.
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