Judge Katherine Failla of the US District Court of New York has been appointed as the interim lead counsel in “consolidated complaint” against New York-based iFinex, the parent company of Tether and Bitfinex Exchange. According to the website of Tether, the accusations related to the manipulation of markets through coin issuance are reckless.
Tether has been the controversial currency since its launch as it was formerly claimed to be backed by one US dollar for each token, but in 2019 it changed the backing to include loans. In the “consolidated complaint”, Tether was accused of utilising the Bitfinex to manipulate the price of Bitcoin in 2017 by releasing its token in the market whenever Bitcoin's value declined.
The latest set of development prompted Tether to reinstate that the allegations are without legal basis and signifies the lack of fundamental understanding of the crypto market. Also, it is false to accuse that USDT tokens were circulated to manipulate markets.
Stuart Hoegner, general counsel of Tether, explained that “amalgamated copycat suits” are baseless and are based on the weak papers by Amin Shams and John M. Griffin. He added that three legal teams are pointing massive discrepancies in each other’s legal theories and pieces of evidence, termed as a three-ring circus.
Tether seems to be least bothered about the interim lead counsel and calls the complaint as “shameless money grab”, defiantly stating that the claim lacks fact-based arguments. It has been pointed out that the academic sloppiness and short of testifications can’t establish an accurate chronology of events via which the accusation of manipulation took place.
Tether is one of the largest stablecoin with the market cap of around $4.6 billions and maintained its cap even during the market crashes. The company makes a significant contribution to the connected crypto ecosystem by providing fiat currency to digital cash to many crypto tokens. Though the company maintain the reserves and confidence of investors, it was accused of using stablecoins to inflate the value of Bitcoins and other cryptocurrencies on its exchange, Bitfinex.