Lawsuit Claims Bitfinex and Tether Manipulated the ‘Largest Bubble in Human History’

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by Teuta Franjkovic · 3 min read
Lawsuit Claims Bitfinex and Tether Manipulated the ‘Largest Bubble in Human History’
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While the plaintiffs claim that it would be “premature” to calculate damage inflicted by Tether and Bitfinex, they have estimated that the defendant’s liability likely surpasses a whopping $1.4 trillion.

In a typical class action, a plaintiff, per Wikipedia, sues a defendant or more of them on behalf of a group, or class, of absent parties. This differs from a traditional lawsuit, where one party sues another party for redress of a wrong, and all of the parties are present in court. We already reported of how Bitfinex and Tether are expecting another lawsuit for market manipulation.

Now, a class-action lawsuit was filed on Monday against Bitfinex, Tether and other members in the United States District Court in the Southern District of New York.

The new federal court class action lawsuit asserts more than $1.4 trillion in damages suffered by class members. The suit was filed by Vel Freedman and Kyle Roche. If that sounds familiar, these are the lawyers who actually succeeded to sue Craig Wright in Florida federal court of violations of the Commodities Exchange and federal RICO statute, among all other stuff.

For those of you who were so lucky to resist this soap opera – let us give you a kind reminder. In August this year, a confirming order has been filed in Craig Wright’s sanctions and contempt hearing.

Magistrate Judge Bruce E. Reinhart then ruled that Wright, the self-declared inventor of Bitcoin, has to forfeit half his crypto mined prior to 2014 to Ira Kleiman as well as half his intellectual property. He was also ordered to pay the attorney’s fees and related expenses incurred in this motion.

The court found Wright had argued in “bad faith, perjured himself and admitted false evidence during the motion.”
The ongoing trial began back in 2018, when Kleiman – the brother of Wright’s late business partner Dave Kleiman – sued for half the Bitcoin holdings in the so-called Tulip Trust, alleging that Wright defrauded the family’s estate.

Be it as it may, plaintiffs described a “sophisticated scheme that participated in, what seems to be, an original innovation – cryptocurrency. Even though cryptocurrency ‘per se’ is a legitimate way of paying, this time, it was used as the form of a defraud to its investors. It was used as an instrument to manipulate markets and conceal illicit proceeds.

Counts I, II and III of the Complaint say “market manipulation in violation of the Commodities Exchange Act. Count IV alleges an antitrust violation, under the Sherman Act against the Tether defendants, confirming that defendant Tether controls more than 80% of the market for stablecoins in the United States and the world,” giving Tether “monopoly power.”

Then we have Count V that claims “violation of the federal RICO statute, a U.S. law initially passed to combat organized crime.” Count VI, after that is regarding the lawsuit alleges fraud against the defendants.

Count VII talks about a statutory violation of NY trade practices law. The last one, Count VIII seeks injunctive relief.
The plaintiffs and defendants named in the lawsuit are:

Plaintiffs David Leibowitz, Benjamin Leibowitz, Jason Leibowitz, Aaron Leibowitz, and Pinchas Goldshtein individually and on behalf of all others similar situated, bring this action against iFinex Inc., BFXNA Inc., BFXWW Inc., Tether Holdings Limited, Tether Operations Limited, Tether Limited, Tether International Limited, DigFinex Inc., Philip G. Potter, Giancarlo Devasini, Ludovicus Jan van der Velde, Reginald Fowler, Crypto Capital Corp., and Global Trade Solutions AG.

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Teuta Franjkovic

Experienced creative professional focusing on financial and political analysis, editing daily newspapers and news sites, economical and political journalism, consulting, PR and Marketing. Teuta’s passion is to create new opportunities and bring people together.

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