New York has dismissed many of the allegations made by the plaintiff against USDT stablecoin issuer Tether and crypto exchange Bitfinex in a class-action lawsuit that alleged both companies of market manipulation.
In a combined statement on Wednesday, September 29, Tether and Bitfinex said that on Tuesday, September 28, Judge Katherine Polk Failla of the US District Court for the Southern District of New York has granted motions to dismiss many of the claims in the case.
According to the defendants, the court “issued a 127-page opinion and order dismissing half of the class action plaintiffs’ claims against Bitfinex and Tether, including all of their RICO claims.”
The companies said that they would not settle the remaining baseless claims. The statement reads:
“Bitfinex and Tether look forward to litigating this case and won’t settle what remains of the plaintiffs’ baseless claims. Litigation will expose this case for what it is: a clumsy attempt at a money grab, which recklessly harms the whole cryptocurrency ecosystem.”
As Crypto Economy reported, this class-action lawsuit was filed in 2019 by two lawyers, Velvel Freedman and Kyle W. Roch. Other plaintiffs included were David Leibowitz, Benjamin Leibowitz, Jason Leibowitz, Aaron Leibowitz, and Pinchas Goldshtein.
The lawsuit alleged that iFinex Inc., BFXNA Inc., BFXWW Inc., Tether Holdings Limited, Tether Operations Limited, Tether Limited, Tether International Limited, DigFinex Inc., Crypto Capital corporation, Global Trade Solutions AG, and many other individuals worked in cooperation to defraud investors, manipulate cryptocurrency markets, and conceal illicit proceeds.
Plaintiffs used an academic paper that blamed the defendants for market manipulation. The lawsuit also claimed that from 2017 to 2018, about half of the growth in cryptocurrency markets was driven by Bitfinex and Tether’s manipulative scheme.
The complaint filed in the court alleged that iFinex, the parent company of Bitfinex, manipulated the crypto market by issuing Tether (USDT) stablecoin, helping to create a bubble in the cryptocurrency market. According to the lawsuit, the activities of both of these renowned crypto organizations caused damages that surpassed “$1.4 trillion U.S. dollars.”
In a statement in June 2020, Tether and Bitfinex rejected all claims saying that the plaintiffs started a lawsuit with an academic paper that had many flaws and they had no further concrete pieces of evidence to prove their claims.
The companies were right as the court has dismissed half of the allegation of the lawsuit. The judge commented that the plaintiffs couldn’t adequately argue the companies’ monopoly across the stablecoin market that they have been claiming.
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