January 16, 2021

Bitfinex and Tether accused of manipulating Bitcoin exchange rate

Bitfinex and Tether accused of manipulating Bitcoin exchange rate

On November 22, Eric Young and Adam Kurtz filed a class action lawsuit against the cryptocurrency Bitfinex exchanges and the Tether startup blockchain that released the Tether stablecoin (USDT).

The statement said that enterprisesmonopolized the Bitcoin cryptocurrency market (BTC), manipulated the asset's exchange rate and information, and also published knowingly false information. According to the plaintiffs, the actions of the defendants affected the cost of BTC and the virtual currency market as a whole.

The document contains the following data:

Bitfinex exchange control and coin issuanceUSDT enabled defendants and their accomplices to coordinate the purchase and sale of Bitcoin during growth and depreciation. When BTC got cheaper, the defendants and their accomplices issued USDT and artificially inflated the price of Bitcoin. After that, they converted BTC to USDT to replenish Tether's reserves.

Young and Kurtz cite employee researchThe University of Texas at Austin, which proved that one account registered with Bitfinex used USDT to pump an asset rate of up to $ 20,000 in 2017. The plaintiffs said that they had to buy and sell BTC at inflated or low prices due to the illegal activities of the trading platform and Tether. According to them, the defendants deliberately spread false information among American investors in Bitcoin in order to hide their criminal schemes.

On November 24, Bitfinex responded to a statement by Young and Kurtz. The platform called the allegations baseless and suggested that the lawsuit was filed out of selfish motives:

Last month, we predicted thatmercantile lawyers will continue to try to make money on lawsuits against Bitfinex and Tether. Let us put all the dots on the “and”: we are not going to settle the claims in the pretrial order and will not make a deal with the plaintiffs. Instead, we will fight to deny the request and drop all charges.

According to representatives of the exchange, the statement about market manipulations is not true, because the site puts its customers and all participants in the digital ecosystem at the forefront.