September 26, 2020

$ 1.4 trillion class action lawsuit filed in New York against Bitfinex and Tether

A class action lawsuit was filed with the Southern District District Court of New York against the Bitfinex cryptocurrency exchange and the issuer $ 1.8 trillion stablecoin Tether.

According to the document, the participants in the lawsuit filedcompanies accused of flooding the market with unsecured tokens pegged to the US dollar. In their opinion, this led to the emergence of "the largest bubble in the history of mankind."

The lawsuit was initiated by five people who did notare customers of the exchange. During the process, they will be represented by lawyers, Kyle Roche and Vel Freedman, who previously won a lawsuit against Craig Wright in the federal court of Florida. Lawyers also accuse Bitfinex of violating the RICO law (The Racketeer Influenced and Corrupt Organizations Act - the US law on investing capital obtained from racketeering) and the Law on Commodity Exchanges.

In their appeal, lawyers refer topublicly available documents and claim that Bitfinex created “a very complex and confusing scheme based on cryptocurrency technologies and thereby manipulated markets, tricked investors and hid illegal income”

Clauses I, II, and III of the claim state that,By manipulating the market, Bitfinex violated the Law on Commodity Exchanges. Paragraph IV states that “Tether controls the more than 80% of the stablecoin market in the United States and beyond,” thereby violating antitrust laws. In paragraph V, the company is accused of violating the RICO law, and in paragraph VI, the plaintiffs are deceived. In the last two paragraphs, Bitfinex is accused of violating the New York City Trading Practices Act and provides a rationale for a court order.

Among the main defendants in the lawsuit are indicatedBitfinex, Tether and their parent company iFinex Inc., as well as a number of related executives and smaller entities (BFXNA Inc., BFXWW Inc., DigFinex Inc., Crypto Capital Corp., etc.).

“Tether, Bitfinex, Crypto Capital and theirthe leaders committed a number of serious crimes, including bank fraud and electronic communications fraud, money laundering and transfer of funds received from various illegal activities, as well as money transfers without a license. It is still premature to calculate the full extent of the losses caused to the defendants, but there is no particular doubt that they exceed the amount of the claim of $ 1.4 trillion, ”the document says.

Recall that this Saturday on the Tether and Bitfinex sites warnings were published that a “groundless lawsuit” was being prepared against them.

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