Tether and Bitfinex accused of manipulating bitcoin price

The lawsuit, filed in the U.S. District Court for the Southern District of New York, alleges that Tether and Bitfinex implemented a sophisticated scheme to fraudulently inflate the prices of cryptocurrencies, including bitcoin, through large-scale, carefully calculated purchases to signal to the market that there was huge demand and thereby cause the prices of these assets to skyrocket.

The plaintiffs allege that Tether and Bitfinex violated both the Commodity Exchange Act (CEA) and the Sherman Antitrust Act. In addition, the plaintiffs claim that expert analysis showed that Bitfinex and Tether issued unsecured USDTs and used them to purchase large amounts of cryptocurrencies, misleading the market about the high demand for them.

“Tether was transferring billions of USDT into its cryptocurrency wallets without backing them with a stockpile of dollars, effectively creating stablecoins out of thin air. These machinations ultimately resulted in innocent cryptocurrency buyers suffering multi-billion dollar losses,” the lawsuit states.
Recall that this is the third lawsuit filed in the case, which was initiated in 2019 and has faced multiple delays since then, including the removal of the plaintiffs' legal counsel in 2022. Tether and Bitfinex challenged the plaintiffs' motion to amend the complaint in 2023, calling it a desperate attempt to resuscitate a hopeless case.