One firm within the crypto industry that seems to be constantly embroiled in drama and legal issues is Bitfinex. This comes after they were revealed in 2019 to have colluded with Tether in order to receive access to hundreds of millions of dollars in reserves in order to cover up losses within the company. Ever since this information came to light, Bitfinex has been embroiled in legal issues, particularly with the New York Attorney General’s office and even though it is now 2020, it seems their legal issues will not be ending anytime soon.

A class-action lawsuit that was previously filed on October 10, 2019, has been re-filed with the New York Southern District on January 8, 2020, against iFinex which is the parent company of Bitfinex. The lawsuit was made by Young et al. and the day after, another class-action lawsuit was filed by a man named Brian Faubus.

Market Manipulation 

The lawsuit in question is for the alleged market manipulation that was carried out by them back in 2017. According to the official documents, Bitfinex sold a large amount of unbacked USDT tokens for bitcoin and this led to an inflation in the bitcoin market that eventually led to the bear market of 2018. It should be noted that Tether has also been involved in the scandal as they had previously claimed that their USDT tokens were all backed up by US dollars but an investigation from the New York Attorney General‘s office revealed that only 73 percent of them were backed up. According to the lawsuit, the confidence investors had in USDT tokens being backed up is what led them to participate in the trade in the first place.

A previous lawsuit had been filed in the state of Washington but was dismissed on December January 7, 2020. Now, the lawsuit has been re-filed but a new party by the name of David Crystal has been added to the mix. The activities that took place in the past seem to be coming back to haunt them even in the new decade and only time will tell as the case goes on.

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