BitFinex, Tether Face Lawsuit for Crypto Market Manipulation from Same Lawyers in Craig Wright Case
Bitfinex Inc. and Tether accused of manipulation of the market during the crypto boom and bust in 2017-2018 by printing about $1 trillion USD worth of Tether (USDT) tokens during the period. The class lawsuit filed under the U.S District Court, Southern District of New York, further accuses the exchange and the token issuers of defrauding investors and lying to them.
Bitfinex and Tether Accused of Fraud
The class suit action filed by David Leibowitz, Benjamin Leibowitz, Jason Leibowitz, Aaron Leibowitz, and Pinchas Goldshtein demands a jury trial on the “sophisticated scheme” by Bitfinex and Tether to conceal illegal activities, defrauding investors and manipulating the crypto market. The plaintiff claims the defendant’s actions amounted to over $1.4 trillion USD in losses. The filing reads,
“Calculating damages at this stage is premature, but there is little doubt that the scale of harm wrought by the Defendants is unprecedented. Their liability to the putative class likely surpasses $1.4 trillion U.S. dollars.”
Furthermore, the stable coin issuers and its affiliate exchange are accused of part-fraud, part-pump-and-dump, and part-money laundering.
A Manipulative Mint by Tether
According to the case filed, Tether printed close to 2.8 billion USDT through 2018-2018 and used them to purchase a number of cryptocurrencies on Bitfinex and other exchanges hence artificially inflating the digital assets prices. As the market value of the crypto industry spiked through the final weeks of 2017 and the start of 2018, a huge bubble started to form.
In the next two months, the crypto industry experienced a $500 billion drop in value –a consequence of the mass printing spree of USDT by Tether, the case file states.
On October 5, Bitfinex and Tether released a published report on their expectations of the lawsuit. The report states the two companies “fully expect” to be sued and
“would not be surprised if such a lawsuit will be filled imminently.”
In late September, Bitfinex and Tether won a motion against the New York Attorney General’s office delaying its timespan to hand over documents regarding its use of Tether. However, on Oct.2 the NYAG asked the courts to stop stalling the investigation into Bitfinex and Tether and set a date in November for the two affiliate firms to produce the needed documents.