Tether and its subsidiary cryptocurrency exchange Bitfinex are accused of artificially inflating cryptocurrency prices by issuing the dollar-backed stablecoin Tether. USDT creates an illusion of increased demand for cryptocurrencies and facilitates leveraged and margin trading, leading to a rise in digital asset prices.
This is the third complaint filed in this case, overseen by U.S. District Judge Katherine Polk Failla. The first complaint was filed in 2019 and amended in 2020. The initial complaint contained eight causes of action, while the amended one had 12.
There have been several issues in the case, including the removal of the plaintiffs’ original law firm, Roche Freedman (now Freedman Norman Friedland), which specializes in cryptocurrency. This was due to video recordings of attorney Kyle Roche admitting to filing frivolous investor lawsuits to assist a client.
In the latest complaint, the plaintiffs’ attorneys presented three claims: violation of the Commodity Exchange Act (CEA) through market manipulation, monopolization, and agreements to restrain trade. The latter two claims violate the Sherman Antitrust Act.
The lawsuit also includes recordings and testimonies from company operators who admitted to manipulative actions.
Tether’s Chief Financial Officer Giancarlo Devasini confirmed that issuing a significant line of credit would compel clients to use borrowed funds to purchase large quantities of BTC, thus driving up the price.
A Tether representative stated that the allegations in the second amended complaint, as well as those in the previous complaints, are unfounded.