Tether and iFinex file a motion to dismiss the market manipulation lawsuit because the plaintiffs don’t prove that billions of dollars of unbacked stablecoins that enter the market as we are reading further in our Tether cryptocurrency news.
The lawyers for Tether and iFinex, the partner company of Bitfinex exchange, filed a motion to dismiss the class-action lawsuit accusing them of deceptive and anti-competitive and market manipulative behavior. Claiming that they lost a lot of money as a result so the plaintiffs alleged in complaint back in October that over five years Tether issued about $3 billion worth of unbacked USDT tokens which the company used to purchase cryptocurrencies on the open market to prop the prices up during the market downturns.
According to the complaint, this caused the total market cap of cryptocurrencies to shoot up to $795 billion back in 2017. The plaintiffs are crypto traders that alleged that they bought cryptocurrencies at an inflated price and incurred more monetary loss. As a class action, the suit represented anyone in the US that could have been injured by the inflated prices. In a supporting memorandum, the defendants’ lawyers argued that the case falls down because of the accusation that Tether printed its USDT stablecoins without any backing and that this claim is based on unfounded allegations rather than the direct knowledge of the matter.
The argued that the plaintiffs have not shown that cryptocurrency prices were artificial at the time in question. This means that the accusations of market manipulation have to be thrown out because the plaintiffs can’t really prove they suffered monetary loss. The allegations of anti-competitive behavior should be thrown out because the class action doesn’t really show how defendants tried to claim the market position by raising the prices as the memorandum reads.
iFinex and Tether are battling other cases as well on similar accusations that USDT is not properly backed by the collateralized reserves. This includes the one suit brought by the New York Attorney general’s office back in 2019. Tether has a circulating supply of more than 10 billion USDT which is aimed to maintain the value of $1 each. Its website listed “proof of funds” letter from the Washington-based law firm FFS with an affirmation that the company held $2,538 billion as of 2018.
The company stated however that USDT is backed “by our reserves which include traditional currency and cash equivalents and from time to time may include other assets and receivables from loans made by Tether to third parties which could include affiliated entities.”
DC Forecasts is a leader in many crypto news categories, striving for the highest journalistic standards and abiding by a strict set of editorial policies. If you are interested to offer your expertise or contribute to our news website, feel free to contact us at [email protected]