In a U.S. courthouse for the Southern District of New York, Judge Katherine Failla heard this afternoon from three plaintiff teams suing iFinex et. al. and vying to serve as lead counsel in the emerging class action with potentially tens of thousands of injured members.

IFinex’s Tether (USDT) stablecoin firm and its Bitfinex subsidiary are charged with manipulating the Bitcoin market in 2017 — something the firm strenuously denies.

Kyle Roche, representing plaintiffs Leibowitz et. al., argued that his firm Roche Cyrulnik Freedman LLP was the first to investigate the alleged market manipulation, the first to file a complaint, and also possessed the top cryptocurrency expertise. “Cryptocurrency is unique,” said Roche, “the law is new, and this case presents difficult definitional issues.”

The case should not be limited to Bitcoin issues alone, he argued; it should include other cryptocurrencies like Ether that may have been harmed by the alleged pump-and-dump scheme.

“Cryptocurrency really works as one market. People who purchase one cryptocurrency often buy many, especially in a bubble” as occurred in the summer of 2017, said Roche. He referenced page 43 of the so-called Griffin paper, introducing it into evidence.

That academic paper, Is Bitcoin Really Un-tethered? by John M. Griffin And Amin Shams, was posted in June 2018 and later updated. It investigated whether Tether inﬂuenced Bitcoin and other cryptocurrency prices during the 2017 boom. The authors found that that purchases with Tether were timed following market downturns and resulted in “sizable increases in Bitcoin prices.” This paper became a foundational piece of research for all four subsequent lawsuits.

Many in the crypto community have long been skeptical that Tether is actually backed by the U.S. dollar at a one-to one ratio as claimed. The Griffin paper also found “insufﬁcient Tether reserves before month-ends.”

The Griffin paper showed, said Roche, that the price of Bitcoin was going down before Tether’s issuance, but after Tether was issued the price of Bitcoin went up — and this happened with six other crypto currencies as well.

Attorneys pit research against experience

Karen Lerner of Kirby Mcinerney LLP, representing plaintiffs’ Young, Kurtz, Crystal et. al., argued that a different kind of experience was more important in an action of this kind. “We are class action lawyers, and we are antitrust and commodities lawyers.” And, she contended, that even though they weren’t the first to file a complaint, their work was the most original, with an extensive regression analysis that identified 115 specific dates when market manipulation occurred and 256 actual transactions. Their firm’s proprietary algorithm would show “a lockstep pricing relationship between spot Bitcoin and Bitcoin futures,” she argued.

Brian Cochran, an attorney with Robbins Geller, representing plaintiff Ebanks et. al., questioned the Roche firm’s unique crypto expertise. “He says his one crypto case in Florida gives them more expertise than my two crypto cases — which were class actions.”

Who gets to sue Tether?

More significant, perhaps, Cochran criticized the class size proposed by the other law firms. “Roche defined it as anyone who owned crypto over the last six years. That’s overwrought — much too broad. Bitcoin and Bitcoin futures are closer to my definition of the class. Not all cryptos should be included.” That would simply be taking money from real victims and giving it to others.

As might be gathered, there were many lawyers in attendance for the oral arguments: 12 attorneys represented the four plaintiffs, while the defense team sent three attorneys just to observe — with space at a premium, several lawyers had to take seats in the jury box. As the session neared conclusion, Judge Failla said, “I had hoped to decide the motion today, but you made my decision very difficult.” She promised a decision on Thursday at 4pm EST.