Bitfinex Asks Court to Dismiss $1.4T Case over Bitcoin Bubble

Crypto exchange Bitfinex plans to file a motion to dismiss a lawsuit over allegations of market manipulation, labeling it "frivolous," according to a corporate statement.

A class-action lawsuit has been filed against Bitfinex, Tether, and others accusing them of fraudulently inflating the cryptourrency market by printing uncovered USDT tokens. The plaintiffs describe the alleged sophisticated scheme as “the biggest bubble in human history.”

However, as it stands, Bitfinex requests that the entire proceeding be dismissed as the frivolous suit lacks a factual or legal basis, and as such, has little or no chance of being won. The Stablecoin Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Read this Term printer said plaintiffs' causes of action has no legal basis to proceed past the very early stage of the case.

A motion to dismiss the suit at the outset might be the proper vehicle, says Bitfinex, as “there are several reasons to look at the Plaintiffs' claims with a jaundiced eye.”

Tether and its affiliate cryptocurrency exchange explained that the accusations largely rely on a concentrated campaign of price manipulation based on an unpublished study on bitcoin’s 2017 boom. Aside from key methodological flaws in the paper, Bitfinex continues, meritless claims were amended to “walk back support for a core allegation of the plaintiffs' complaint.”

The paper by John Griffin, an academic with a history of spotting fraud in financial markets, and Amin Shams, a graduate student, found that at least half of the increase in the price of Bitcoin and other big Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term at the time was attributable to “one large player.”

While the authors suggest those running Bitfinex either knew or even assisted the scheme, the exchange wonders how its flows of tethers manipulated a market that is more than seven hundred times bigger than the amount of total USDTs in circulation.

Should the decision wouldn't go Bitfinex’s way, it would have to admit or deny the allegations and then undergo a lengthy, expensive process during which it should prove that Bitcoin’s skyrocketing gain wasn’t caused by shady activities on its platform.

Bitfinex executives have denied in the past that the exchange was involved in any manipulation and that Tether issuances cannot be used to prop up the price of Bitcoin or any other coin.