Bitfinex and Tether Lawsuit Revised After Plaintiffs Drop Action
Controversial cryptocurrency exchange Bitfinex and its sister stablecoin issuer Tether have had a lawsuit against them withdrawn by two plaintiffs and re-filed with the addition of a new plaintiff.
The two companies were accused of creating “the largest bubble in human history” in a lawsuit filed in New York in October, which alleged that Bitfinex and Tether manipulated the crypto market out of up to US$1.4 trillion. A second, similar case was then brought against the two companies by Eric Young and Adam Kutz, who claimed that Bitfinex and Tether “monopolized and conspired to monopolize the Bitcoin market,” as well attempting to manipulate the market and making inaccurate claims.
Both cases were built upon longstanding claims that Tether essentially printed billions of dollars worth of tokens to artificially inflate prices and convince the market that there was a far greater demand for cryptocurrencies than was the reality.
A document filed on Tuesday, January 7, in the US District Court for the Western District of Washington shows that both Young and Kutz agreed to the voluntary dismissal of their case against iFinex, the parent company of Bitfinex and Tether. The suit was refiled the following day with the addition of David Crystal as plaintiff. It is not yet known why Young and Kutz decided to refile the case, and US law states that cases which have been voluntarily dismissed can never be brought to court again if it is dismissed a second time.
Both companies are steadfast in their denial of the accusations, describing the claims thrown at them as “meritless and mercenary.” Stuart Hoegner, general counsel to Bitfinex, said that the refiled case was also baseless and “will be disposed of in due course.”
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Tether had emphasized that its coin is backed 1:1 with the US dollar but flip-flopped on this stance in February when under investigation by the Department of Justice, changing its position to say its reserves “from time to time may include other assets.” Tether then made another walk back from this claim in April, when one of its lawyers admitted in court that the USDT was actually only 74% backed by cash or cash equivalents.
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