- Crypto Trader Files Lawsuit Against Bitfinex
- Tether and Bitfinex Allegedly Shared False Information about USDT
According to reports, a lawsuit has been filed against top crypto exchange Bitfinex. Per the report, the lawsuit accuses the crypto exchange and its extension Tether, of market manipulation. They claim the goal was to harm traders and benefit themselves.
The lawsuit alleges that Bitfinex and a number of entities affiliated to it, carried out deceptive, and anti-competitive, market-manipulating practices. Which in turn caused economic damages to the plaintiffs. The lawsuit was filed on Sunday, October 6 in New York.
The Plaintiffs are Seeking Class-action Status
It is understood that the plaintiffs, are seeking class-action status. They are claiming that the total damages amounts to $1 trillion. The lawsuit was filed by David Leibowitz, Aaron Leibowitz, Pinchas Goldshtein, Benjamin Leibowitz, and Jason Leibowitz. They are represented by Kyle Roche and Vel Freedman (the lawyers who won a case against Craig Wright recently).
The defendants include, Tether, Bitfinex, Digfinex and their current executives along with Philip Potter (former chief strategy officer). Payment processor, Crypto Capital is also named as one of the defendants.
Tether and Bitfinex Allegedly Shared False Information About USDT
The plaintiffs claim that defendants (Bitfinex and Tether in particular) “shared false information. They claimed that USDT was backed 1:1 by USD.” The lawsuit also allege that the USDT was used to buy Bitcoin to inflate the overall crypto market which gave birth to the 2017/2018 bull run and subsequent bear market.
Speaking in a statement, investor David Leibowitz remarked that:
“As someone who has invested a lot in BTC and the growth of the crypto space, I believe that the bad actors in the ecosystem have put a wedge to development and cooled consumer confidence in the system.”
Bitfinex and Tether Denied any Claims of Market Manipulation
Responding to a request for comments on the matter, a spokesperson for Bitfinex and Tether, Joe Morgan, sent a statement published during the weekend. The statement alleged that the companies were not surprise at the reports of a lawsuit published by “a non-peer reviewed paper positing that Tether’s issuances aid the manipulation of the crypto market.”
This isn’t the first time that there have been reports of market manipulation against Tether. These allegations have circulated for nearly one year. In one study published in June 2018, researchers affiliated to the University of Texas said BTC’s price rose after “Bitfinex exchange used tether to buy Bitcoin when prices declined.”
Bitcoin (BTC) Price Today – BTC / USD
The Department of Justice has opened an investigation into these allegations. However, it is unclear if the Department has made any concrete findings or reached any conclusions at press time.