Bitfinex, Tether manipulation lawsuit moves forward

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If Bitfinex and Tether thought their problems would just fizzle out, they’re discovering that luck’s not on their side. According to an update provided by The Block, the two individuals behind a lawsuit accusing the duo of manipulating the price of Bitcoin have updated the suit and are pushing forward with their claims. The amended suit was entered only about a month after the plaintiffs had stated that they wouldn’t be making any changes.

Eric Young and Adam Kurtz, as well as many within the cryptocurrency community, still assert that Tether and Bitfinex actively worked to manipulate the price of Bitcoin over the past several years. The allegation comes following several studies conducted on Tether’s activity and the assertion that the company’s USDT stablecoin was used to facilitate huge jumps in Bitcoin’s value starting in 2017.

According to the lawyer for Young and Kurtz, Karen Lerner of the Kirby McInerney LLP law firm, the lawsuit had been withdrawn on January 7 and refiled the following day. The update now includes a third plaintiff, David Crystal, and Lerner explains, “Plaintiffs refiled the case to efficiently vindicate the rights of Bitcoin traders and Bitcoin futures traders.’

The original case had also been filed in Washington, but the refiled suit has been submitted to the courts in New York, the same state where Bitfinex and Tether are facing accusations of wrongdoing by the attorney general. However, there’s no indication that the two actions are linked in any way.

As they have stated all along, Tether and Bitfinex deny any wrongdoing and they call the lawsuit “meritless.” After the case was refiled in New York, general counsel for Bitfinex Stuart Hoegner reiterated their stance, adding, “Apparently the plaintiffs have determined that their action should be filed in the Southern District of New York, which raises the question of why it was filed in Washington State in the first place. Whether this complaint is filed in Washington State or the Southern District of New York, it remains entirely meritless and will be disposed of in due course.”

The refiling will buy Tether and Bitfinex a little time, but it won’t make the headache go away. They are still accused, according to the lawsuit, of having “manipulated prices of Bitcoin by issuing USDT unbacked by a 1:1 U.S. dollar reserve and using the newly created USDT to purchase Bitcoin through U.S.-based cryptocurrency exchanges Bittrex and Poloniex.”