Tether and Bitfinex have previously asserted the suit was simply an attempt to use “Bitfinex and Tether to obtain a payday,” and have pointed out the similarity of the filing to a similar class action which emerged in October. Both lawsuits are directed at Ifinex, the parent firm of Bitfinex and Tether.
A Dec. 4 New York Attorney General (NYAG) filing adds to the group’s troubles, and is an extension of ongoing issues with the NYAG which emerged in April last year. The newly refiled class action complaint could be an attempt to move the action to a district with greater support for legal scrutiny of the controversial crypto groups.
The revised complaint states that “During the Class Period, Defendants, through their unique control and access to printing USDT, 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. Defendants’ unbacked printing of USDT artificially inflated the price of Bitcoin, which enabled Defendants to extract supra-competitive profits from Bitcoin traders.”
As news.Bitcoin.com reported previously, Tether altered its policy regarding the backing of its stablecoins in early 2019, changing the wording from an implied 100%, redeemable fiat reserve to “Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities.”
Bitfinex and Tether’s problems largely stem from suspicions regarding shared company management and interests, as well as affiliations with companies such as payment processor Crypto Capital, whose principal Oz Yosef has been indicted by a U.S. Grand Jury on shadow banking charges. The indictment followed a seizure of Crypto Capital funds, $880 million of which was found to belong to Bitfinex. The group released a statement in October claiming they had been a victim of fraud.
What are your thoughts on the updated class action filing against Ifinex? Let us know in the comments section below.
Image credits: Shutterstock.
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