A revised lawsuit has been filed against Bitfinex, Tether and their parent firm iFinex, for allegedly manipulating the bitcoin market.

Karen Lerner of Kirby McInerney LLP, one of the attorneys involved in the case, told The Block on Friday that the case has been refiled in the Southern District of New York court (see the revised lawsuit below). The original case was filed at the federal court in the U.S. state of Washington.

“Plaintiffs refiled the case to efficiently vindicate the rights of Bitcoin traders and Bitcoin futures traders,” Lerner told The Block.

The plaintiffs – Eric Young, Adam Kurtz and David Crystal – withdrew the case on Jan. 7, only to refile on Jan. 8. The case originally began last November, when the plaintiffs alleged that Bitfinex and Tether issued inaccurate information and "monopolized and conspired to monopolize the Bitcoin market."

Bitfinex and Tether have denied the accusations contained in the lawsuit, describing the effort as “meritless and mercenary.”







Inside the revised lawsuit







The 97-page revised lawsuit claims that, during the class period (Oct. 1, 2014 to present), the defendants, “through their unique control and access to printing USD₮ [Tether stablecoin], manipulated prices of Bitcoin by issuing USD₮ unbacked by a 1:1 U.S. dollar reserve and using the newly created USD₮ to purchase Bitcoin through U.S.-based cryptocurrency exchanges Bittrex and Poloniex,” adding:



"Defendants’ unbacked printing of USD₮ artificially inflated the price of Bitcoin, which enabled Defendants to extract supra-competitive profits from Bitcoin traders."



The plaintiffs also accused the defendants of manipulating the bitcoin derivatives market, including bitcoin futures traded on the Chicago Mercantile Exchange (CME). “Bitcoin and Bitcoin futures prices run in parity, or lockstep, in the same direction,” the revised lawsuit states.

The plaintiffs seek injunctive relief as well as money damages in an amount to be determined at trial.

SDNY Complaint by The Block on Scribd