Plaintiffs in Bitfinex Tether Manipulation Lawsuit Will Not Drop the Case

A class-action lawsuit has been filed against Bitfinex and Tether in the U.S. District Court for the Western District of Washington.

3 December 2019 | AtoZMarkets – The plaintiffs in a class-action lawsuit accusing the Tether (USDT)-affiliated crypto exchange Bitfinex of Bitcoin (BTC) price manipulation have declined to amend their complaint.

Is Bitfinex manipulating the Bitcoin price?

Bitfinex has been accused of manipulating the price Bitcoin for some time. Last November, the U.S. Justice Department, together with the Commodity Futures Trading Commission (CFTC), launched a criminal investigation against the cryptocurrency exchange and Tether.

U.S. authorities are trying to figure out how an additional issue of the USDT token could have affected the growth of Bitcoin’s exchange rate in 2017. That year, the price of the flagship cryptocurrency increased by 20 times and set a record value of $20,000.

Concerns surrounding Bitfinex

The financial regulator is concerned that crypto exchanges could create artificial activity in the market to mislead traders. It is not only the U.S. government that suspects Bitfinex of illegal activities. In addition to unsubstantiated accusations from the crypto community, professionals such as professors at Texas University or Bloomberg analysts have also expressed this view.

As per the court filing dated 2 December, the plaintiffs denied amending their complaints. A study conducted by the professors John Griffin and Amin Shams reveals that Bitcoin purchases at Bitfinex consistently increased when the value of the cryptocurrency fell by a certain amount. Experts are confident that the exchange issued USDT tokens for no purpose other than to inflate the price of Bitcoin.

Each year, the accusations against Bitfinex and Tether have become more substantiated and serious. The company is facing a $1.4 trillion class-action lawsuit due to alleged market manipulation in 2017. The USDT issuer is denying everything, calling the claims “ridiculous” and accusing those who disagree of incompetence.

Inspection for fraudulent activity

Currently, no judicial decisions have been taken against Bitfinex in this matter.  Also, the U.S. government has not brought any formal charges against the exchange. This means that so far all assumptions about the impact of the exchange on the price of Bitcoin are no more than a theory.

According to Alpari analyst Vladislav Antonov, it is unlikely that the exchange is manipulating prices. The expert asserts that the market is unregulated, but the owners of the stock exchanges understand that sooner or later any deceptions will come to the surface during the regulators’ inspection. It is not the exchanges themselves who are manipulating prices but the market makers.

AtoZMarkets has reached out to Bitfinex and this article will be updated once we receive more details.

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