Poloniex And Bittrex Join The List
Recently, the largest stablecoin, Tether (USDT) surpassed XRP and took its position as the third-largest coin in terms of market cap. Tether’s sister company, Bitfinex has also onboarded many developments on to its platform. Despite, the unswerving upgrades on these platforms, trouble seems to follow them along with their parent companies.
A 156-page revised lawsuit was filed on 3 June 2020, in New York’s Southern District Court. Back in 2017, when Bitcoin hit an all-time high of $20,000, Bitfinex, as well as Tether, artificially boosted the supply of USDT further inflating the price of Bitcoin, artificially. The first lawsuit against these firms was filed back in October 2019, which demanded $1.4 trillion in total damages.
Notably, in the latest lawsuit, one of the plaintiffs David Leibowitz, a cryptocurrency trader wasn’t on the list, however, he seems to have been replaced by Matthew Script another cryptocurrency trader.
The lawsuit further alleged that USDT was being created “out of thin air” as Tether had issued “billions” of USDT with no USD backing. The filing further read,
“Tether hid that fact by “selling” newly issued USDT to Bitfinex, a crypto-exchange that was secretly owned and operated by the same individuals who owned and operated Tether.”
Apart from the above-mentioned entities, two other prominent exchanges in the crypto-verse, Bittrex, and Poloniex were also accused of engaging in the 2017 market manipulation. The lawsuit claimed that both these platforms had willingly assisted Tether and Bitfinex to make use of the “fraudulently issued USDT.” Poloniex reportedly accomplished about $7.6 billion USDT tradings for different cryptocurrencies every month. The filing stated,
“Bitfinex and Tether were able to maintain the illusion that USDT was fully backed with the assistance of shadow banks, including Crypto Capital, a shadow bank that Fowler operated, which ensured that Bitfinex and Tether had access to U.S. correspondent banks and thus could exchange U.S. dollars in response to requests from legitimate customers as needed.”