Stablecoin Tether is one step closer to seeing a resolution to a triple wave of class action lawsuits lodged against it. According to a statement on Tether’s website, the judge has appointed lead interim counsel for plaintiffs in what is being described as a “consolidated complaint against Tether.”
Judge Katherine Failla of the U.S. District Court for the Southern District of New York has named the lead interim counsel for plaintiffs in what has become a “consolidated complaint” against New York-based iFinex, the parent company of both Tether and Bitfinex.
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In the complaints, Tether is accused of using its access to Bitfinex to manipulate the Bitcoin price in 2017 through coin issuance and masterminding what the plaintiffs characterize as the “largest bubble in human history,” thereby wiping out hundreds of billions in “crypto wealth.” [Bloomberg] Tether is coming out swinging, appearing emboldened by the development now that there is more clarity surrounding the litigation and echoing its previous sentiment by stating,
“The allegations in the complaint are without merit or legal basis, and exhibit a fundamental lack of understanding of the market structure of cryptocurrencies. Indeed, it is reckless and false to allege that USDT tokens are issued in order to manipulate markets.”In one of the lawsuits filed against Tether in October 2019, the plaintiffs are being represented by Roche Freedman, the attorney who defended Craig Wright, as BeInCrypto has previously reported. Another complaint, dubbed Young et al v. iFinex Inc et al, was originally filed in Seattle, Washington. It was later voluntarily dismissed and refiled in New York. [Offshore Alert]
Tether’s Fight
Tether’s general counsel Stuart Hoegner described the “amalgamated copycat lawsuits” as “baseless,” saying they are based on a “foundationally flawed paper by John M. Griffin and Amin Shams” that fails to support the claims lodged against the company. In his statement, Hoegner describes what sounds like a three-ring circus during a hearing that transpired on Monday, saying:“We witnessed three legal teams poking huge holes in each others’ legal theories and evidentiary footing.”Tether appears less concerned about who would serve as lead interim counsel, defiantly stating that they won’t be able to create a fact-based argument anyway and calling the complaint a “shameless money grab.”
Tether, the largest stablecoin with a market cap of $4.6 billion, has maintained its price during the latest cryptocurrency market crash. The company maintains that reserves back its coins despite repeated accusations that they are not. New York has not been kind to Tether, which has also been the target of an investigation by the state’s attorney general, who claimed that the stablecoin issuer and Bitfinex co-mingled customer and company funds.
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Gerelyn Terzo
Gerelyn caught wind of bitcoin in mid-2017, and after becoming smitten by the peer-to-peer nature of crypto has never looked back. She has been covering the space ever since. Previously, she wrote about traditional financial services, Wall Street and institutional investing for much of her career. Gerelyn resides in Verona, N.J., just a hop, skip and a jump from New York City.
Gerelyn caught wind of bitcoin in mid-2017, and after becoming smitten by the peer-to-peer nature of crypto has never looked back. She has been covering the space ever since. Previously, she wrote about traditional financial services, Wall Street and institutional investing for much of her career. Gerelyn resides in Verona, N.J., just a hop, skip and a jump from New York City.
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