Three separate lawsuits – David Leibowitz et al, Eric Young et al, and Bryan Faubus et al – were filed against Bitfinex and Tether. According to the court filing on January 16, legal counsel of all three parties requested a merger of the disputes.
In their court filings, Leibowitz, Young and Faubus accuse Bitfinex and Tether of manipulating the cryptocurrency markets. According to the class action filings, the three lawsuits share common factors including claims that sister companies unlawfully manipulated the price of Bitcoin and its futures.
All lawsuits were filed in the U.S. District Court for the Southern District of New York. Two companies did not oppose the plaintiffs, with Tether saying it’s looking forward to discrediting the “fanciful accusations”.
“Tether will continue to defend the digital token ecosystem and the many contributions of the cryptocurrency community, and will not now or in the future pay any amount to settle plaintiffs’ claims,” said Bitfinex in a statement.
Last week, plaintiff Eric Young’s withdrew the lawsuit and refiled in the Southern District of New York. The reason for this decision was unknown at first, but it later became clear that they withdrew the lawsuit from the Western District of Washington jurisdiction so they could join the other two in New York.
The plaintiffs Eric Young and Adam Kurtz accused Bitfinex and Tether of publishing inaccurate information, saying the two companies “monopolized and conspired to monopolize the bitcoin market.”
Last April, New York’s attorney general also moved against the defendants, accusing them of manipulating the market by printing unbacked tethers.
“When bitcoin prices were falling, Defendants and their co-conspirators printed USD₮s and artificially increased the price of bitcoin,” says the original filing. “Once Defendants and their co-conspirators artificially inflated the price of bitcoin, Defendants and their co-conspirators then converted the bitcoin back into USD₮s to replenish Tether’s reserves.”
Crypto exchange Bitfinex has already denied the allegations, saying the lawsuit was groundless and that it would oppose any “nuisance settlements”.
In his recent statement, Stuart Hoegner, general counsel to Bitfinex, said: “Apparently the plaintiffs have determined that their action should be filed in the Southern District of New York, which raises the question of why it was filed in Washington State in the first place. Whether this complaint is filed in Washington State or the Southern District of New York, it remains entirely meritless and will be disposed of in due course.”
According to the U.S. law, lawsuits that have already been voluntarily withdrawn can never be filed to court again if dismissed for a second time.
In November, Tether issued a letter of intent saying the cryptocurrency company plans to file a motion to dismiss the lawsuit which claims Tether manipulated the bitcoin price. The letter was published about a month after the lawsuit was originally filed, and in it, Tether said that plaintiffs couldn’t prove the allegations regarding them and Bitfinex.