The Tether and Binfinex owner have “caught another case” and this time it’s because of alledged manipulation of Bitcoin prices.
A class-action complaint was filed on Sunday over “propping and popping the largest bubble in history,” leading to the disappearance of around USD 265 billion in wealth from the crypto sphere.
The lawsuit was filed at the U.S. District Court for the Southern District of New York by a few investors. The investors claim iFinex can execute effectively unbacked Bitcoin buy orders that may not cost them anything with unbacked Tether.
Tether is said to be backed 1:1 by fiat reserves, the company revealed earlier in the year that it may also use other assets to support its value.
The orders may artificially prop or push up prices in the illiquid crypto market, the complaint said.
“Whatever the case might be and however the court might find the outcome, this suit will bring an unprecedented level of transparency to Tether,” Emin Gun Sirer, an associate professor at Cornell University, said on Twitter. “That’s something that almost everyone will agree is a good thing for the whole space.”
(Source Bloomberg)
Tether replied and said that it “anticipates meritless and mercenary lawsuit based on bogus study.”
“Tether and its affiliates have never used Tether tokens or issuances to manipulate the cryptocurrency market or token pricing,” the statement said.
Tether still has other lawsuits in the pipeline as in April, the New York Attorney General accused the companies behind Tether and Bitfinex of working together and losing more than USD 850 million in client and corporate funds. Both cases still continue.
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