Bitfinex and Tether are mired in litigation, and investors say they create "the biggest bubble in human history."

Today, the US District Court in the Southern District of New York received a class action lawsuit against objects such as Bitfinex and Tether.

The class action alleges that the company fraudulently raised the value of the cryptocurrency market by issuing unsecured US dollar tokens, creating "the biggest bubble in human history."

Tether

Tether is the issuer of the stable currency USDT, which until recently claimed that its issued USDT was supported by the US dollar “1:1” on its offshore bank account. But earlier this year, in response to a survey by the Office of the Attorney General of New York (NYAG), Tether admitted that its stable currency was only supported by "74% (dollar funds)."

Today's lawsuit quoted a research report published by the University of Texas in 2018, saying that Tether and its sister company, Bitfinex, artificially created "a growth of up to half of the cryptocurrency market."

The lawsuit states:

“This move is related to a complex plan that uses a disruptive innovation – cryptocurrency – to deceive investors, manipulate the market, and hide illegal gains, including fraud, high shipments and money laundering. The plan is mainly done through Bitfinex and Tether, which mix their corporate identity with client funds and hide their extensive collaboration, enabling them to manipulate the cryptocurrency market with unprecedented efficiency."

The lawsuit was filed by Roche Freedman LLP on behalf of several investors who believed they were "spoofed" by Tether and Bitfinex. These investors said they suffered more than $1.4 trillion in losses. Interestingly, their lawyers also successfully sued CSW in the Federal Court of Florida.

Tether said in a press release on Saturday that the lawsuit was "worthless." The company said it will actively respond to the lawsuit, claiming that the plaintiff's lawyer is a “greedy lawyer” and that the University of Texas research report is “screened” and “never published”.

According to CoinMarketCap, Tether occupies a large share of the cryptocurrency market, and it is believed that the issuance of Tether is related to the rise in market prices. This is likely to be benign: for overseas investors who cannot get dollars, the existence of Tether makes sense, so it makes sense for them to buy USDT in large quantities.

However, in Tether's words, 26% of Tether is only supported by creditors' “accounts receivables” and “cash equivalents.” This disclosure led to some inferences, as the lawsuit said today, “Bitfinex and Tether Billions of unsecured USDT were issued to manipulate the price of Bitcoin and other cryptocurrencies."

It is worth noting that the lawsuit took into account the responses of Tether and Bitfinex a few days ago , saying that the two companies "are fully aware of their incredible damage to the cryptocurrency market."

The lawsuit also pointed to the behavior of Tether's continuous issuance of USDT since the investigation, calling it a "reckless behavior."

We will continue to update Blocking; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more

Blockchain

Bakkt also can't impact traditional cryptocurrency futures trading? - Coin, OKex, Matcha, and the same station

Text | Mutual Chain Pulse · Liang Shan Hua Rong Mutual chain pulse: Although Bakkt has not been able to detonate...

Blockchain

Three major domestic virtual currency exchanges focus on compliance business and actively engage with local governments and state-owned enterprises

China Times (www.chinatimes.net.cn) reporter Ran Xuedong trainee reporter An Lingfei Beijing reports The currency cir...

Blockchain

A brief history of crypto exchanges: a glimpse into the evolution of the most powerful organization in the blockchain industry

Written by: Nathaniel Whittemore & Clay Collins Compilation: Lu Jiangfei Source: ChainNews ChainNews I. Preface T...

Blockchain

SBF returns to the witness stand admitting mistakes but refusing to plead guilty, Binance, ex-girlfriend, and Three Arrows caused FTX to collapse.

SBF revealed insider information that Binance had once sought to acquire FTX, and described himself as the CEO who do...

Blockchain

Demystify Bybit's new product "black technology", you can open both long and short, insurance contracts!

If you have seen Jobs's Apple conference, Rebus' Xiaomi conference, or Lao Luo's wee phone conference....

Blockchain

Long Push Receiving 1 million ARB airdrop, Summary and Reflections on 2 Years in the Circle

Note This article is from @0xfarmer_ on Twitter, summarized by MarsBit as follows Time flies. I have finished my subs...