The Legal Landscape of Cryptocurrency
In a world where Bitcoin rules the financial sphere like a king on a throne of digital gold, the recent class action lawsuit surrounding iFinex Inc., Bitfinex, and Tether (USDT) takes center stage. With Judge Katherine Failla at the helm in the Southern District of New York, the drama unfolds as the first act is written with the consolidation of multiple civil actions into a single class action: Leibowitz v. iFinex Inc. This isn’t just your run-of-the-mill court case; it’s a real-life courtroom thriller.
Old Meets New: The Novelty of Cryptocurrency Law
One of the unique aspects of this lawsuit, as Judge Failla pointed out, is that it blends established legal precedents with the still-nascent world of cryptocurrency regulations. She articulated the challenge, stating, “The cryptocurrency law is quite novel, [with] lots of issues and not a lot of resolution…” Case in point: the allegations of market manipulation during the Bitcoin boom of 2017. How do you prove that a decentralized currency was manipulated? This is like trying to nail jelly to a wall.
Proving Market Manipulation: The Uphill Battle
Felix Shipkevich, a legal expert in this arena, specializes in the hurdles that come with proving market manipulation of cryptocurrencies. He expressed skepticism over the plaintiffs’ ability to meet the stringent requirements:
“I am pessimistic that they will be able to overcome the hurdle of proving market manipulation of a decentralized currency like Bitcoin.”
The catch? Each industry has its own definitions and consequences for market manipulation. Proving manipulation in the wild west of digital currencies is like herding cats.
The Role of Tether: A Key Player in Bitcoin’s Story
At the heart of this legal storm lies Tether, a stablecoin that has allegedly impacted Bitcoin trading volumes overwhelmingly. According to reports, Tether trading accounted for a staggering 76.2% of BTC trading into fiat currencies or stablecoins as of December 2019. That’s not just backseat driving; that’s steering the whole vehicle! Professor John Griffin even noted,
“Crypto can be pushed around easily by big whales.”
With such influence, the implications of any court findings could send ripples throughout the cryptocurrency community.
On the Horizon: What’s Next for the Plaintiffs and Defendants?
As the legal rollercoaster continues, the defense team at Walden Macht & Haran LLP is gearing up to file a motion to dismiss the case. This nail-biting phase could take as long as six months, and if they win, it’s game over for the plaintiffs. However, should the plaintiffs survive, the courtroom could turn into a pressure cooker of revelations, depositions, and trading data that could blow the lid off the entire crypto market. iFinex Inc’s spokesperson aptly remarked, “We look forward to putting the facts before the court, and addressing the baseless allegations in the judicial forum.” Buckle up, folks; this ride is far from over!
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