The Bitfinex cryptocurrency exchange, already involved in one class-action lawsuit, will now have to defend itself against another one. It saw this coming, as the company had already advised that it was ready to combat any “mercenary” lawsuits. That adjective is the exchange’s new favorite word, as it asserts the newest lawsuit is “mercenary and baseless.”
Bitfinex is under fire for several reasons, including “losing” $850 million that had been held by a former banking partner that is now facing its own legal battles. It has also been called out for allegedly manipulating the price of BTC, in conjunction with Tether, and this is where lies the crux of the latest string of lawsuits.
Investors launched a lawsuit in New York over accusations that Bitfinex and Tether created “the largest bubble in history.” The new lawsuit takes a similar voice, but was launched in the U.S. District Court for the Western District of Washington. It was introduced without notification to Bitfinex, according to a statement issued by the exchange, and is “unsound” and “without merit.”
The exchange adds, “As we predicted last month, mercenary lawyers continue to try to use Bitfinex and Tether to obtain a payday. To be clear, there will be no nuisance settlements or settlements of any kind reached. Instead, all claims raised across both actions will be vigorously contested and ultimately disposed of in due course. Once they are, Bitfinex and Tether will fully evaluate their legal options against those bringing and promoting the baseless claims.”
In addition to the investor lawsuits, Bitfinex and Tether still have to contend with a fight against the New York Attorney General’s Office over the ordeal surrounding the $850 million mentioned previously. Tether reportedly gave Bitfinex, through loans and other considerations, the money it needed to cover the losses and then the two allegedly tried to keep everything related to the agreements covered up.
As the companies face tighter scrutiny and reduced confidence on the part of the crypto community, Bitfinex has suffered economically. Its market share is down considerably, and executives are having to spend more time putting out fires than trying to build up the company.
In relation to its latest attack, as well as the others, Bitfinex adds in its statement, “Bitfinex 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 and traded on Bitfinex pursuant to market demand, and not for the purpose of controlling the pricing of crypto assets. It is irresponsible to suggest that Tether or Bitfinex enable illicit activity due to the efficiency, liquidity and wide-scale applicability of Tether’s products within the cryptocurrency economy.”
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