Plaintiffs in a class action lawsuit against Tether and Bitfinex have filed a new, streamlined complaint in the Southern District of New York. The complaint accuses the companies of manipulating the cryptocurrency markets and violating antitrust laws. This is the third complaint filed in this case, overseen by U.S. District Judge Katherine Polk Failla. The lawsuit alleges that Tether and Bitfinex engaged in a scheme to artificially inflate cryptocurrency prices by issuing USDT, a stablecoin not fully backed by U.S. dollars, creating the illusion of increased demand for cryptocurrencies.
The complaint includes chat and deposition logs from the companies’ operators, allegedly admitting to manipulative actions. Tether’s Chief Financial Officer reportedly acknowledged that issuing a substantial credit line not backed by real money would cause customers to buy large amounts of Bitcoin, driving up the price. Tether has denied these claims, stating that they are without merit and based on false allegations. The company remains confident that they will prevail in this litigation.
The lead plaintiffs in the case are U.S.-based crypto traders, and several other civil class action suits have joined the case. The attorneys for the plaintiffs have not responded to requests for comments. The lawsuit alleges violations of the Commodities Exchange Act, market manipulation, monopolization, and agreement in restraint of trade, as well as violations of the Sherman Antitrust Act.
The lawsuit has faced challenges, including the removal of the original plaintiffs’ counsel due to allegations of filing frivolous lawsuits. The case has seen multiple iterations of complaints, with the latest version being a more concise version of the previous complaints. The plaintiffs’ motion to amend the complaint for a second time was granted by Judge Failla.
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Cheyenne Ligon, the CoinDesk news reporter who covered this story, focuses on crypto regulation and policy. She has no significant crypto holdings. Follow her on Twitter @cheyenneligon for more updates on this case and other cryptocurrency news.