If there is any firm within the blockchain and cryptocurrency sector that has been involved in a number of lawsuits over the years, it is Bitfinex and the management of Tether. This started with accusations of Tether being a manipulation tool for bitcoin or not being 100 percent backed up with US dollars as its management has claimed. This was eventually confirmed in a New York Attorney Generals office that only 73 percent of Tether is backed up with US dollars and also that they have colluded with Bitfinex to hide millions of dollars in losses. Even after all of this, there are still allegations being brought against both companies for various allegations.
Now, four different lawsuits that have been brought against Tether, Bitfinex and their parent company IFinex with regards to the alleged manipulation of the 2017 bitcoin price have been consolidated into a single suit.
A Single Suit
This new information comes via a court order which is dated January 24, 2020, and was filed officially on January 27, 2020. As per the order given by Judge Failla of the court of the Southern District of New York (SDNY), four different lawsuits and their sub listings are going to be heard in a single case against the various companies. The plaintiffs in these cases are Leibowitz, Young, Faubus, and Ebanks.
The accusation against the companies is that they colluded in 2017 to manipulate the bitcoin price which caused the now famous 2017 bitcoin price bubble which was preceded by a significant bear run. It should also be noted as a possible class-size of those affected by these actions could include everyone who has ever bought bitcoin after 2017. This case also draws lights on the complicated relationship between the three companies in the operations within the crypto market and according to Ebanks, the relationship has always been kept rather opaque so as to allow them to carry out their fraudulent activities.
“Despite defendants’ best efforts, the close interconnections between Tether and Bitfinex were exposed, in part, through the leak of documents from offshore legal services provider Appleby (colloquially dubbed the “Paradise Papers” leak) in November 2017,” the document says.