Altcoin News: $1.4 Trillion Lawsuit Filed against Bitfinex and Tether

October 8, 2019, by Marko Vidrih on ALTCOIN MAGAZINE

A class action lawsuit has been filed with the Southern District of New York District Court, whose members estimate the losses from the actions of the Bitfinex cryptocurrency exchange and the Tether stablecoin issuer at more than $1.4 trillion.

Companies, according to the prosecution, flooded the market with unsecured tokens pegged to the US dollar, which led to the emergence of “the largest bubble in human history.”

The lawsuit was filed by lawyers Vel Freedman and Kyle Roche, who previously managed to sue Craig Wright in a federal court in Florida. Among other things, they accuse Bitfinex of violating the provisions of the Law on Commodity Exchanges and the Law on Combating Racket and Corruption.

Plaintiffs cite publicly available documents and claim that Bitfinex organized a “sophisticated scheme that coopted a disruptive innovation — cryptocurrency — and used it to defraud investors, manipulate markets, and conceal illicit proceeds.”

Paragraphs I, II, and III of the lawsuit contain arguments to confirm that Bitfinex violated the Law on Commodity Exchanges. Paragraph IV refers to antitrust violations in which “defendant Tether controls more than 80% of the market for stablecoins in the United States and the world,” giving Tether “monopoly power.” According to paragraph V, the company violated the law on combating racketeering and corruption, and paragraph VI contains allegations of the deceit of the plaintiffs. The last two paragraphs mention violations of the New York City Trade Practices Act and the rationale for issuing a court order.

The defendants in the lawsuit include Bitfinex, Tether, their parent company iFinex Inc., as well as a number of related entities and executives.

“Plaintiffs David Leibowitz, Benjamin Leibowitz, Jason Leibowitz, Aaron Leibowitz, and Pinchas Goldshtein individually and on behalf of all others similar situated, bring this action against iFinex Inc., BFXNA Inc., BFXWW Inc., Tether Holdings Limited, Tether Operations Limited, Tether Limited, Tether International Limited, DigFinex Inc., Philip G. Potter, Giancarlo Devasini, Ludovicus Jan van der Velde, Reginald Fowler, Crypto Capital Corp., and Global Trade Solutions AG.”

Tether and Bitfinex published a warning on Saturday that a “groundless lawsuit” is being prepared against them, based on “erroneous assumptions, incomplete and biased data and a false methodology”.

Author: Marko Vidrih