This post was most recently updated on October 19th, 2019

Class-Action Lawsuit Against Tether and Bitfinex For Market Manipulation

A New York-based law firm represented by Vel Freedman and Kyle Roche, the layers that sued Craig Wright has filed a class-action lawsuit against Finex Inc. the mother company behind Bitfinex exchange and Tether.

The two layers claim is that Tether and their affiliated crypto exchange Bitfinex have been involved in market manipulation, defrauding investors and creating the largest bubble in history.

Kyle Roche tweeted :

Today, @RocheFreedmanLP filed a class action lawsuit on behalf of those who own cryptocurrency against Tether and Bitfinex (and others) for manipulating the cryptocurrency market to create the largest bubble in history. @VelvelFreedman @joemdelich https://t.co/c3iOW5eTF7 — Kyle Roche (@KyleWRoche) October 7, 2019

The lawsuit was recorded on Oct. 6 with a document pointing that Bitfinex and Tether created a complicated scheme which includes fraud, pump and dump, and money laundering.

This is part of the suit document:

“This action concerns a sophisticated scheme that coopted a disruptive innovation — cryptocurrency — and used it to defraud investors, manipulate markets, and conceal illicit proceeds. 2. Part-fraud, part-pump-and-dump, and part-money laundering, the scheme was primarily accomplished through two enterprises — Bitfinex and Tether — that commingled their corporate identities and customer funds while concealing their extensive cooperation in a way that enabled them to manipulate the cryptocurrency market with unprecedented effectiveness.”

The class-action lawsuit filed by the two layers alleges over $1.4 trillion in damages suffered by class members.

Bitfinex and Tether anticipated the lawsuit

The lawsuit comes 2 days after Bitfinex and Tether published a statement saying:

Tether is aware of an unpublished and non-peer reviewed paper falsely positing that Tether issuances are responsible for manipulating the cryptocurrency market

Tether ends their statement saying:

Tether and its affiliates have never used Tether tokens or issuances to manipulate the cryptocurrency market or token pricing. All Tether tokens are fully backed by reserves and are issued pursuant to market demand, and not for the purpose of controlling the pricing of crypto assets. It is irresponsible to suggest that Tether enables illicit activity due to its efficiency, liquidity and wide-scale applicability within the cryptocurrency ecosystem.

This is a developing story and will be updated when new developments happen.

Bitfinex and Tether lawsuit is bullish for bitcoin because of tether holders will unload their USDT for BTC. The same thing happened when NYAG filed a claim against Finex Inc.