Tether and Bitfinex Face Market Manipulation Allegations in Amended Class Action Lawsuit

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.

In a recent filing to the United States District Court for the Southern District of New York, Tether and Bitfinex were accused of violating antitrust laws and manipulating the market. The two cryptocurrency companies are charged with breaking the Commodities Exchange Act (CEA) through market manipulation, monopolization, and agreements in restraint of trade. This is to put the situation and allegations into perspective.

The complaint identified all of the individuals as "Plaintiffs": Matthew Script, Benjamin Leibowitz, Jason Leibowitz, Aaron Leibowitz, and Pinchas Goldshtein. They initiated the legal action against them. The most recent documentation is a revised and condensed version of the second complaint, a component of an ongoing class action case, as per Coingape.

As seen in the petition, Tether and its sibling cryptocurrency exchange "executed a sophisticated scheme to fraudulently inflate the price of crypto commodities, which is a class of crypto-assets that includes bitcoin." According to reports, Tether accomplished this by introducing its USD-backed stablecoin, USDT, into the cryptocurrency market without completely backing it.

Acting in this manner gave the impression that there was a greater demand for cryptocurrency throughout the market. Furthermore, it "facilitates trading of [cryptocurrencies] on credit and loaned funds," ultimately leading to an increase in the prices of cryptocurrencies. The initial legal complaint was submitted in the same case in 2019, and the following year, an amended cryptocurrency lawsuit was filed. This comes after two initial legal complaints were made in the same case. Judge Katherine Polk Failla of the United States District Court was in charge of both.

While the initial version of the complaint contained eight different causes of action, the revised version featured twelve different causes of action, this provides additional evidence that the most current iteration has been reduced in size.

Generally speaking, this specific litigation has been subject to many challenges in the past. One of these elements is the withdrawal of the crypto law firm Roche Freedman, which had been defending the plaintiffs in the beginning.

This removal appears to be essential because questionable video recordings of Bitcoin lawyer Kyle Roche were made public. Since the legal company was first introduced to the general public two years ago, Roche has also been the firm's founder. In these films, Roche was shown confessing that he engaged in the practice of filing frivolous litigation to assist his clients in winning cases. This put his authenticity as a purported upholder of the law to the test.

While this is going on, the most recent lawsuit asserts that there are chat and deposition logs from the company operators in which they purportedly confess to engaging in manipulative tactics.

Notably, a spokesperson for Tether has made it quite apparent that the allegations contained in the second amended lawsuit are without foundation.