Coindesk reported that in a class action lawsuit that has been going on for five years, the plaintiffs filed a third amended complaint against stablecoin issuer Tether and its sister exchange Bitfinex, accusing the two companies of jointly manipulating crypto market prices and violating the Commodity Exchange Act. (CEA)" and the "Sherman Act".
Tether vs. Bitfinex class action lawsuit
Documents from the Southern District of New York Court stated that this originated from the latest developments in the class action lawsuit against Tether and Bitfinex in 2019, in which the plaintiff submitted a simplified latest complaint.
It is reported that this is the third complaint filed in this lawsuit. The first two complaints were filed and revised in 2019 and 2020 respectively, with 8 and 12 charges, and now they have been reduced to 3 charges.
Manipulating currency prices
The plaintiffs allege in the complaint that Tether and Bitfinex "implemented a complex scheme" to fraudulently increase the price of cryptocurrencies, including Bitcoin:
The two companies pushed USDT into the market through "large and well-orchestrated purchases and promotions" and created the illusion of strong demand to drive up the price of the cryptocurrency.
Evidence shows Bitstamp exchange was involved in suspicious trading activity in late 2013
The complaint even disclosed the chat records of Tether’s chief financial officer Giancarlo, indicating that they were aware that they were engaging in manipulation:
Giancarlo admitted in his previous testimony that after promoting the demand, he then provided users with huge USDT loans that were "not backed by the U.S. dollar," allowing them to "use these fake money" to purchase large amounts of cryptocurrency, thereby driving up the price.
USDT is not backed by a reserve
The plaintiff also emphasized that Tether used billions of dollars in USDT to fund market manipulation, showing that its USDT did not receive one-to-one U.S. dollar support:
In fact, Tether itself issued billions of USDT without being backed by U.S. dollars, they just created it out of thin air.
It added, “The two companies used unsupported USDT to purchase large amounts of crypto commodities, ultimately causing innocent crypto investors to suffer billions of dollars in losses.”
However, similar accusations were dismissed by another judge in another Tether class action lawsuit, when the plaintiff also claimed that the statement that USDT was backed by a 1:1 reserve was a misrepresentation.
(The complaint against USDT was rejected by the court for not receiving 1:1 support, and Tether stated that the prosecution’s claim was baseless)
Charged with violating the Commodity Exchange Act and the Schumann Antitrust Act
In this regard, as a simplified version of the previous lawsuit, the plaintiff made the following three accusations against the two companies:
Market manipulation, violation of the Commodity Exchange Act (CEA)
Monopoly, violation of the Sherman Act
Restraint of Trading Agreement, Violation of the Sherman Act
Tether: Conspiracy theories are baseless
Tether condemned this, saying that the allegations in this revised complaint are completely baseless like the previous complaint:
What matters most are the facts and evidence, not the plaintiff’s false and misleading accusations. We are confident that we will prevail in this lawsuit and that the plaintiffs' ridiculous conspiracy theories will be dismissed.
However, Tether has indeed been in trouble before from various institutions and media due to its lack of regulatory compliance and operational transparency, using its opaque reserves and minting mechanism to make a fuss.
(Tether’s battle with the media! Documents reveal that Tether’s reserve assets were involved in Chinese company securities)
This article Tether and Bitfinex class action lawsuit: jointly manipulate the encryption market and drive up currency prices, Tether refutes conspiracy theories first appeared on Chain News ABMedia.
