Plaintiffs Accuse Tether and Bitfinix of Manipulating Crypto Market
In reality, Tether issued billions of USDT to itself with no US dollar backing — simply creating the USDT out of thin air." This alleged deception, according to the plaintiffs, led to "billions of dollars of damage to innocent crypto commodity purchasers."
Plaintiffs Claim Tether Allegedly Issued Billions in Unbacked USDT
A central point of the complaint is that Tether's assurances about USDT being backed one-to-one by U.S. dollars were false. The plaintiffs allege that Tether issued billions of USDT without any dollar backing. They claim that this action violated both the Commodities Exchange Act (CEA) and the Sherman Antitrust Act.
The complaint states,
"In reality, Tether issued billions of USDT to itself with no US dollar backing — simply creating the USDT out of thin air."
This alleged deception, according to the plaintiffs, led to "billions of dollars of damage to innocent crypto commodity purchasers."
An exhibit from the amended filing highlighting alleged suspicious trading activity on the Bitstamp exchange.
Tether Case Faces Delays and Legal Challenges Since 2019
This is the third complaint filed in this case, originally opened in 2019. The lawsuit has faced numerous delays, including the removal of the plaintiffs' original legal counsel in 2022. Tether and Bitfinix challenged the plaintiffs' request to amend the complaint in 2023, describing it as a last-ditch effort to revive a failing case.
The defendants argued,
"Two years of fact discovery — including more than a million pages of document discovery and numerous depositions — have not revealed a single shred of evidence supporting the market manipulation scheme alleged in the complaint."
Despite these challenges, the plaintiffs remain steadfast in their accusations.
Evidence of Market Manipulation by Tether and Bitfinix Presented to Support Plaintiffs
An exhibit from the amended filing points to alleged suspicious trading activity on the Bitstamp exchange. This evidence aims to support the plaintiffs' claims of market manipulation. The exhibit shows patterns that the plaintiffs argue are consistent with a scheme to inflate cryptocurrency prices artificially.
The plaintiffs assert that
"expert analysis shows that Bitfinix and Tether issued unbacked USDT and used that debased USDT to buy large amounts of crypto commodities."
This claim is central to their argument that the companies engaged in deceptive practices that harmed the crypto market and its participants.
Tether and Bitfinix Deny Allegations as Legal Battle Intensifies
As the legal battle continues, the plaintiffs and defendants are preparing for the next phase of the lawsuit. The outcome of this case could have significant implications for the cryptocurrency industry, especially concerning the regulation and oversight of stablecoins like USDT.
Meanwhile, Tether and Bitfinix have consistently denied the allegations. They maintain that USDT is fully backed by reserves. Furthermore, they argue that the plaintiffs' claims lack evidence and are based on misunderstandings of the cryptocurrency market's dynamics.
