Tether can claim a stage win for himself. The prosecution is not yet off the table.
“We are grateful to Judge Failla for her careful report which uncovered many shortcomings on the part of the dock”. With these words responded the accused US company Tether Operations Limited in a blog post on the recent decision of District Judge Katherine Polk Failla. It’s about a class action lawsuit against Tether and Bitfinex. As the court recently said in a 127-page document communicated, some charges are now dismissed – to the great relief of Tether.
Because Tether published a blog post immediately after the court’s update of the case. In this, the company is satisfied, confident and even goes so far as to state that the entire “case is doomed to failure”. But if you take a closer look at the court document, then it is not a final victory – but rather a partial success.
Because under the point “Conclusion” the court writes:
The defendants’ motions to dismiss are partially granted and partially denied. Counts three, eight, nine, ten, and twelve are dismissed. Count six is partially dismissed. Respondents’ motions to dismiss are denied in relation to Counts one, two, four, five, seven and eleven.
Katherine Polk Failla, United States District Judge
There are a total of 12 charges. As can be seen from the above conclusion, 5 of them are totally dismissed and one count is partial. That leaves six counts to be dealt with by the courts. The accused are Tether and Bitfinex. Those defendants are instructed to submit a response to the changes in the lawsuit by October 28. Prosecutors, a group of crypto investors who saw themselves harmed by Tether, are encouraged to submit a joint status letter and updated case management plan by November 18.
Contents of the lawsuit against Tether
In the document published on September 28, the US court also commented on the charge itself. The defendants are suspected of having made timed purchases of cryptocurrencies using the stablecoin tether. In doing so, the defendants wanted to give the market the deceptive feeling that there is great demand for cryptocurrencies, according to the court document. This pretended and artificial demand had driven up certain prices, the prosecutor said. This is said to have caused a bubble in the crypto market.
The defendants are also named in more detail in the document:
(…) iFinex Inc, BFXNA Inc, BFXWW Inc, Tether Holdings Limited, Tether Operations Limited, Tether Limited, Tether International Limited, DigFinex Inc, Giancarlo Devasini, Ludovicus Jan van der Velde, Philip G. Potter, Reginald Fowler, Crypto Capital Corp , Bittrex, Inc, and Poloniex, LLC are referred to as the “Defendants”.
Judicial document of September 28th
Comparison in February
As early as February 2021, a comparison was made between the New York Attorney General, Tether and iFinex (operator of the Bitfinex crypto exchange). As BTC-ECHO reported, Bitfinex is said to have secretly borrowed $ 850 million from Tether at the time. Bitfinex, so the allegation, had to borrow the money to cover up losses. Attorney General Letitia James said that Bitfinex and Tether are said to have unlawfully covered up massive financial losses – with the aim of keeping their fraudulent system running. Tether was never fully covered by US dollar reserves, as stated by the company, according to Letitia James.
The February settlement sentenced the accused to a fine of 18.5 million US dollars. Tether was also asked to submit reports on the deposited reserves every three months. Even if this lawsuit was ended with a settlement. The outcome of the civil suit has not yet been decided, although one of the parties already feels confident of victory.