Tether and Bitfinex have denounced a class-action lawsuit against them, calling it ‘baseless’. The lawsuit claims that the two companies colluded to manipulate Bitcoin’s price in 2017.
In the latest twist, the plaintiffs have amended the lawsuit to include Bittrex and Poloniex. However, according to Bitfinex, the amendments have not changed the fact that the lawsuit is flawed. The plaintiffs have failed to tie the lawsuit to facts or the law, the companies said in a joint statement.
The plaintiffs conflated perceived correlation with causation, according to Bitfinex. Through its general counsel Stuart Hoegner, the exchange downplayed the claims as “untrue and unsupportable.”
Bitfinex further claimed that the plaintiffs have been clutching at straws in their bid to nail down the exchange. The academic paper they first referred to fell apart, forcing them to create an unproven conspiracy theory, it stated.
The plaintiffs ignored the laws of supply and demand, the workings of Tether, and publicly available data in their lawsuit, Hoegner said.
Instead, they rushed to conclude that the high demand for Tether translated to market manipulation. “If you see a group of people opening umbrellas, that doesn’t mean that they caused it to rain,” he stated.
“This meritless lawsuit is an insult to the ingenuity of Tether’s customers, as well as the success and innovation of the industry and all who play a role in it. Bitfinex and Tether will vigorously defend themselves, their customers, their stakeholders, and the crypto community against these unfounded allegations and continue to counter fiction with facts.”
Largest Bubble in Human History
The class-action lawsuit alleges that Bitfinex was behind the ‘largest bubble in human history‘. The plaintiffs claim that Tether printed billions of dollars’ worth of USDT which Bitfinex used to make strategic purchases of Bitcoin. These purchases led Bitcoin’s price to skyrocket in 2017 before a correction in 2018 wiped out 75% of the gains.
“With the willing assistance of Bittrex, Inc. and Poloniex LLC, two other crypto-exchanges, Bitfinex and Tether used fraudulently issued USDT to make strategically timed, massive purchases of cryptocommodities just when the price of those commodities was falling.”
It also claimed that Crypto Capital, a Panamanian company, facilitated the crime.