Crypto

Tether, Bitfinex manipulated crypto markets, according to amended lawsuit

Tether, Bitfinex manipulated crypto markets, according to amended lawsuit

The stablecoin and crypto exchange continue to face legal action that threatens their stability

The legal battle surrounding cryptocurrency manipulation has taken a new turn with the inclusion of Tether and Bitfinex in an amended class action lawsuit. The two companies stand accused of violating antitrust laws and artificially inflating cryptocurrency prices.

This recent filing in the Southern District Court of New York expands the ongoing lawsuit initiated by a group of five plaintiffs: Matthew Script, Benjamin Leibowitz, Jason Leibowitz, Aaron Leibowitz, and Pinchas Goldshtein. The revised complaint accuses Tether, a stablecoin issuer, and its affiliated exchange, Bitfinex, of employing a “sophisticated scheme” to manipulate the cryptocurrency market.

Central to the allegations is Tether’s USDT stablecoin, which is pegged to the US dollar. The plaintiffs claim Tether flooded the market with USDT without sufficient dollar reserves, creating a false impression of increased demand for cryptocurrencies. This allegedly facilitated credit-based trading and ultimately drove up prices.

This lawsuit builds upon previous legal challenges filed against Tether and Bitfinex in 2019 and 2020. The earlier complaints have faced hurdles, including the withdrawal of the initial law firm representing the plaintiffs, Roche Freedman. The firm’s founder, Kyle Roche, was caught on video making controversial admissions about his litigation practices, raising questions about his credibility.

However, the revised lawsuit presses forward, citing alleged chat logs and deposition records from the companies’ operators that supposedly demonstrate manipulative behavior. Tether, through a spokesperson, has vehemently denied these accusations, calling them “baseless.”

The outcome of this lawsuit remains to be seen. However, it represents a significant development in the ongoing debate surrounding cryptocurrency regulation and potential market manipulation within the industry.

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