Three plaintiffs who have been involved in three separate lawsuits against Tether and its sister company Bitfinex have moved to consolidate their cases into one class-action suit.
Court filings by David Leibowitz et al., Eric Young et al., and Bryan Faubus et al., accuse Tether and Bitfinex of creating “the largest bubble in human history” after they allegedly manipulated the crypto market out of up to US$1.4 trillion. All three cases were brought against the companies off the back of longstanding claims that Tether essentially printed billions of dollars worth of digital tokens in order to inflate prices and convince investors that the demand for cryptocurrency was considerably greater than in actuality.
All three cases have now been refiled as one in the US District Court for the Southern District of New York. While Tether and Bitfinex both refute the claims made against them, they have shown no objection to the consolidation of the cases, with Tether even writing in a statement that it “looks forward” to disproving the “fanciful accusations.” The move to consolidate the cases provides further clarity to the decision of Eric Young to withdraw his case and refile it with the addition of David Crystal as a plaintiff.
A fourth suit was also filed against Tether and Bitfinex last week, which is expected to be consolidated with the three already preexisting cases.
“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,” read the company’s statement. “Tether and its affiliates have never used Tether tokens or issuances to manipulate the cryptocurrency market or token pricing.”
While Tether has always advertised that its coin is backed 1:1 with the US dollar, that position has been called into question recently. When under investigation by the Department of Justice in February, it changed its position to say that its backing may include other assets from time to time. This position was cast into further doubt when a lawyer representing Tether said that its coin was only 74% backed by cash or cash equivalents.
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Joseph Spezzano received a Masters Degree in computer science from The University of Massachusetts. Joseph has been working as a full-time blockchain programmer for the past 5 years. In his spare time, Joseph enjoys writing for CryptocurrencyInvestments.com and traveling.