Crypto Chaos: Tether and Bitfinex Face Class Action Over Alleged Market Manipulation

The Legal Firestorm Brewing

In a plot that seems ripped from a financial thriller, a New York-based legal firm, Roche Freedman, has thrown a wrench in the crypto space by filing a class-action lawsuit against Tether and Bitfinex. Their accusations are as bold as they are scandalous, claiming the two have been orchestrating a grand scheme of deceit that includes market manipulation and investor fraud.

The Tweet That Started the Storm

On October 7, Kyle Roche, the founding partner at Roche Freedman, took to Twitter to issue a proclamation that echoed like a church bell: Tether and Bitfinex have been behind the “largest bubble in history.” This wasn’t just a tweet; it was a red flag thrown into the proverbial crypto shark tank.

Claims of a “Sophisticated Scheme”

The lawsuit, filed on October 6, alleges that the entities have engaged in a complex scheme, described as “part-fraud, part-pump-and-dump, and part-money laundering.” This raises the eyebrows of many who thought the digital currency world was merely a futuristic playground, not a seedy underbelly of financial tricks.

What’s the Issue with Tether’s Claims?

• Allegation: Tether claimed that every issued USDT was backed by an equal amount of U.S. dollars.
• Counterpoint: Roche Freedman asserts this claim is false, suggesting Tether flooded the market with unbacked USDT to artificially influence prices.
• Consequences: This deceptive strategy purportedly allowed Tether and Bitfinex to manipulate the market in ways no one had seen before, creating boom-and-bust cycles to their advantage.

Anticipating the Legal Showdown

If you thought this drama was nearing an explosive climax, think again. Just two days before the lawsuit was filed, Tether and Bitfinex had already prepared their defensive strategy, having learned about gossip circulating in the form of an unreleased paper. This document allegedly suggested that Tether’s issuance was behind the market manipulation. Naturally, both companies labelled the paper’s assertions as “baseless.”

The Stage is Set for Battle

As the legal showdown heats up, Tether and Bitfinex stand firm in their resolve to defend themselves against what they describe as unfounded claims. With the stakes as high as the crypto prices themselves, the resolution of this case could have implications that ripple throughout the crypto world. Buckle up; it’s going to be a wild ride!