Bitfinex and Tether Accused of Market Manipulation in Amended Class Action Complaint

In an amended class action complaint, the cryptocurrency exchange Bitfinex and the stablecoin issuer Tether have become parties to the dispute. Both companies are currently being accused of engaging in activities similar to market manipulation.

Cryptocurrency exchange Bitfinex and stablecoin issuer Tether have been named as defendants in a class action lawsuit, with both companies accused of engaging in activities that could be likened to market manipulation.

In a recent filing with the United States District Court for the Southern District of New York, Tether and Bitfinex were hit with claims that they violated antitrust laws and manipulated the market. The two cryptocurrency companies are accused of breaking the Commodities Exchange Act (CEA) through market manipulation, monopolization, and agreements in restraint of trade. To put this into perspective, the complaint identifies all of the individuals as “Plaintiffs”: Matthew Script, Benjamin Leibowitz, Jason Leibowitz, Aaron Leibowitz, and Pinchas Goldshtein filed the lawsuit against them. According to Coingape, the latest filing is a revised and condensed version of the second complaint in an ongoing class action case.

As stated in the petition, Tether and its sister cryptocurrency exchange “carried out a sophisticated scheme to fraudulently inflate the price of crypto commodities, a class of crypto-assets that includes bitcoin.” Tether reportedly did this by introducing its USD-backed stablecoin, USDT, into the cryptocurrency market without fully backing it.

This activity allegedly gave the impression that there was a greater demand for cryptocurrency across the market. In turn, it “facilitates trading of [cryptocurrencies] on credit and loaned funds,” ultimately leading to an increase in the prices of cryptocurrencies.”

The initial legal complaint in this case was filed in 2019, followed by an amended cryptocurrency lawsuit the next year. Both were overseen by Judge Katherine Polk Failla of the United States District Court.

While the first version of the complaint had eight different causes of action, the amended version featured 12, offering further insight that the latest iteration has been condensed.

Overall, this particular litigation has faced several challenges in the past, with one element being the departure of crypto law firm Roche Freedman, which initially represented the plaintiffs.

This removal seems to be pivotal as questionable video recordings of Bitcoin lawyer Kyle Roche were made available to the public. Roche has also been the founder of the law firm since it was first introduced to the general public two years ago. In these clips, Roche was seen confessing to the practice of filing frivolous lawsuits to help his clients win cases, which brought his authenticity as a supposed upholder of the law into question.

Meanwhile, the latest lawsuit claims to have chat and deposition logs from the company operators where they allegedly admit to using manipulative tactics.

It is important to note that a Tether spokesperson has made it clear that the allegations in the second amended complaint are unfounded.

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