Tether and Bitfinex Face Renewed Legal Scrutiny in Crypto Manipulation Lawsuit

Tether and Bitfinex are now parties to an extended class action lawsuit, which has exacerbated the legal conflict over claimed manipulation of the bitcoin market. The latest document, filed in the Southern District Court of New York, charges the aforementioned corporations with violating antitrust rules and manipulating cryptocurrency pricing.

The complaint that led to this most recent development was filed by five plaintiffs: Pinchas Goldshtein, Benjamin Leibowitz, Jason Leibowitz, Aaron Leibowitz, and Matthew Script. The stablecoin issuer Tether and the related exchange Bitfinex are accused of putting together a “sophisticated scheme” to influence the cryptocurrency market.

Central Claims and Previous Legal Challenges

The core of the allegations focuses on Tether’s USDT stablecoin, which is pegged to the US dollar. The plaintiffs allege that Tether issued large amounts of USDT without sufficient dollar reserves, creating a misleading impression of increased demand for cryptocurrencies. This purportedly enabled credit-based trading and artificially inflated prices.

These claims build upon earlier legal actions taken against Tether and Bitfinex in 2019 and 2020. Those complaints encountered obstacles, including the withdrawal of the initial law firm representing the plaintiffs, Roche Freedman. Controversy arose when the firm’s founder, Kyle Roche, was recorded making questionable admissions about his litigation tactics, casting doubt on his credibility.

Despite these setbacks, the revised lawsuit moves forward, presenting alleged chat logs and deposition records from the companies’ operators that purportedly show manipulative behavior. A Tether spokesperson has strongly refuted these accusations, labeling them as “baseless.”

The outcome of this lawsuit remains uncertain. However, it marks a significant escalation in the ongoing discussions about cryptocurrency regulation and potential market manipulation within the industry. This case could have wide-ranging implications for how digital currencies are overseen and traded, impacting both legal and market landscapes.

As the lawsuit progresses, it highlights the increasing scrutiny facing cryptocurrency companies and the growing demand for regulatory clarity in the sector. The legal proceedings against Tether and Bitfinex are set to play a crucial role in shaping future regulatory frameworks and ensuring market integrity.