Tether and Bitfinex drawn into amended class action lawsuit

Stablecoin issuer Tether and cryptocurrency exchange Bitfinex are involved in a class action lawsuit. Both companies are currently facing allegations that border on market manipulation.

The latest case involving Tether and Bitfinex involves three causes of action

In a recent lawsuit filed in the U.S. District Court for the Southern District of New York, Tether and Bitfinex were accused of market manipulation and violating antitrust laws. To put it in perspective, the two crypto companies are accused of violating the Commodities Exchange Act (CEA) through market manipulation, monopolization, and restraint of trade agreements.

The lawsuit was filed by Matthew Script, Benjamin Leibowitz, Jason Leibowitz, Aaron Leibowitz and Pinchas Goldshtein, all of whom were named as “plaintiffs” in the lawsuit. The latest filing is a new, scaled-down second lawsuit that is part of an ongoing class action lawsuit.

According to the filing, Tether and its sister crypto exchange “executed an elaborate scheme to fraudulently inflate the price of crypto commodities, a class of crypto assets that includes Bitcoin.” Tether allegedly accomplished this by pushing its USD-backed stablecoin USDT into the crypto market without being fully backed.

This created the illusion of increased demand for cryptocurrencies in the market, thereby “facilitating trading (in cryptocurrencies) on credit and with borrowed funds” and ultimately driving up the price of cryptocurrencies. This follows two initial lawsuits

in the same case; the first 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 complaint contained eight causes of action, the amended version contained twelve causes of action, further confirming that the latest version is a watered-down version.

Original lawyer removed from Tether lawsuit

Overall, this particular litigation has faced several drawbacks in the past, including the removal of the crypto law firm Roche Freedman, which originally represented the plaintiffs.

The removal appears necessary after unsavory video footage of cryptocurrency lawyer Kyle Roche was leaked. Roche is also the founder of the law firm and was made public two years ago. In these videos, Roche was seen admitting to filing frivolous lawsuits to help his clients win cases, proving his authenticity as a supposed legal practitioner.

Meanwhile, the latest lawsuit alleges that there are chat and statement transcripts from the company’s operators in which they allegedly admitted to manipulative actions.

Notably, a Tether spokesperson clarified that the claims in the second amended complaint are without merit.

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