Tether and Bitfinex have just been handed another lawsuit to contend with as a legal firm in New York has filed against the companies, accusing them of extensive market manipulation. According to the filing, both defendants have allegedly been deliberately engaging in market manipulation, misreporting its activities and also cheating its investors.
An excerpt from the suit claims:
“From 2017 through 2018, Tether printed 2.8 billion USDT and used it to flood the Bitfinex exchange and purchase other cryptocurrencies. This artificially inflated demand for cryptocurrencies and caused prices to spike.”
Filed by Roche Freedman, the suit also states that Tether’s claim that its USDT token, supposedly a stablecoin and backed by the dollar, is not true. It states that Tether, tricking the market into believing the USDT was actually backed by the dollar, was able to manipulate prices across the cryptocurrency sector.
“Because the market believed the lie that one USDT equaled one U.S. dollar, Bitfinex and Tether had the power to, and did, manipulate the market on an unprecedented scale to profit from boom-and-bust cycles they created.”
Regardless of the lawsuit, Tether has gone ahead to mint two transactions of USDT of $20 million and $12 million each. This seemed to lend some credence to the accusation of market manipulation because many times in the past, there have been correlations between heavy USDT minting and Bitcoin price spikes.
Tether and Bitfinex also released statements before this lawsuit, suggesting that they were expecting a publication filled with “baseless accusations” against them.
Image Credits: Pixabay
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