Bitfinex, the cryptocurrency exchange firm and stablecoin issuer Tether are faced with yet another accusation on a move to manipulate the bitcoin markets.
The district court in the Western District of Washington on Nov. 22, filed a case, the details which came from a case brought by the New York attorney general in April against the same two firms filed by Eric Young and Adam Kurtz.
This is the second filling action in one month being taken On new York case which is still on the run as the defendants are still appealing to know whether to go on with documentation.
According to the attorney general who made claims among other things that the tether (USDT) stablecoin was not actually fully backed by U.S. dollars. Stating that
Bitfinex and Tether “monopolized and manipulated the Bitcoin market,” It was a conspired monopoly, information or claims about the market trend were manipulated, stated by Young and Kurtz in a lengthy list of claims.
It was also noted that the two firm’s misconduct caused prices of Bitcoin futures, as well as prices of Bitcoin underlying the Bitcoin futures, to be somewhat unreal during Oct. 1, 2014 to present,” Young and Kurtz said while stating further that:
“As a result of defendant’s control of USD₮ issuances, it therefore gave rise to Bitfinex perdition to Defendants and their co-conspirators to coordinate purchases and sales with rising and falling Bitcoin prices. The defendants keep swinging artificial claims on each rising or falling situations with Bitcoin. As soon as there’s a fall in Bitcoin, they will conspire to print USDT and inflate prices of Bitcoin and converts the Bitcoin back to tether by way of replenishing the reserve.”
There were indications by the two law suit that the price of bitcoin was inflated in the lead up to its 2017 all-time high of around $20,000 with a single Bitfinex account used USDT as cited by professors at University of Texas.
“As a matter of fact. during most times, Defendants and their co-conspirators including the employees that conducted Defendants’ affairs through illegal acts, must have intentionally or otherwise unknowingly and made false statements to U.S. Bitcoin investors and the public for the purpose of concealing Defendants’ scheme,” as contained in the suit.
Meanwhile as the case has been brought at the federal court in Washington State, Young and Kurtz who are based in Pennsylvania and New York, respectively said that they traded at artificial prices due to the alleged actions of the defendants.
Bitfinex regarded the Washington law suit as being baseless. Saying it’s their way to spoil the image and effort of Bitfinex clients and all participants in digital currency ecosystem.
They added further that mercenary lawyers are using the situation to build their pockets. They stated in their blog post on Sunday.
For now the case is in full force as all claims raised will be outright contested as we wait for outcome, the defendants said.
No conclusions yet has been made public, as the U.S Department of Justice are still on the issue of market manipulation and investigation.
Stablecoins faces regulations, to be treated as money service business- FinCen
Credit: Daniel PalmerJOIN OUR COMMUNITY