New York Judge dismissed half of the class action plaintiffs’ claims against Tether and Bitfinex including all the Racketeer Influenced and Corrupt Organizations Act (RICO) cases.
Tether Will Fight Remaining Cases too.
Judge Katherine Polk Failla, District Court for the Southern District of New York, has closed around half of the pending class action cases against Tether and Bitfinex.
Notably, all the cases under RICO were also dismissed. Tether stated that “Even for the remaining claims, the Court’s order raises substantial issues that will ultimately be fatal to the plaintiffs” case.
The USDT stablecoin issuer added that “This is unsurprising given that plaintiffs’ claims are meritless.”
The company believes that it has been wrongfully targeted. It will fight the case until a final verdict is announced. “Litigation will expose this case for what it is: a clumsy attempt at a money grab, which recklessly harms the whole cryptocurrency ecosystem.”
Major Events During Legal Battles
- The original complaint was filed on October 6, 2019, accusing the companies (iFinex, Bitfinex, and Tether) of market manipulation involving “part-fraud, part-pump-and-dump, and part-money laundering.”
The class action suit was filed through Roche Freedman, which claimed that Tether “issued extraordinary amounts of unbacked USDT to manipulate cryptocurrency prices.”
- An amended complaint was filed on June 3, 2020, with Matthew Script, Benjamin Leibowitz, Jason Leibowitz, Aaron Leibowitz, and Pinchas Goldshtein as plaintiffs. They alleged that the iFinex subsidiaries “made massive, carefully timed purchases of cryptocommodities to signal to the market that there was enormous demand and thus cause the price of those commodities to spike.”
- Earlier this year, an order dated February 23, 2021, from the Office of Attorney General of the State of New York, mandated that the parent of Bitfinex and Tether, iFinex, pay $18.5 million for commingling client and corporate funds worth $850 million.
Bitfinex was accused of sending the $850 million to Crypto Capital Corp, a payment processer reportedly based in Panama, without informing its clients. Later the funds went missing.
Also, in the mandated disclosures it was mentioned that Tether’s reserves were not backed 1-to-1 with the USD, which had also been found in a previous disclosure report.
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