Another Lawsuit Against Bitfinex

1 min reading

The Bitfinex exchange has not had a winning streak in recent months. This time, a group of investors filed a class action for damages of up to a trillion dollars.

Bitfinex's problems

In April, New York Attorney General Letitia James accused Bitfinex of using the resources of Tether to cover its own losses which amounted to  around 850 million dollars. The Crypto Capital platform was used for this, even though no contract was signed with the platform itself. The company has appropriated the money, although none of the Bitfinex investors had been made aware of the losses. The trial in this case is ongoing.

Moreover, the exchange has been struggling with hackers since 2015, when they attacked for the first time. At that time losses amounted to just 400,000 dollars, but just a year later another attack deprived Bitfinex of over 73 million USD. In addition, the exchange is accused of manipulating the price of Bitcoin during its greatest successes at the end of 2017. 

Despite all doubts and allegations, the exchange recorded a profit of over 400 million USD for 2018.


Another lawsuit

There was more, as another lawsuit was filed, accusing Bitfinex of creating "an organized scheme enabling the use of cryptocurrencies by unverified investors to manipulate markets and withhold illegal practices."

The content of the lawsuit also informs about the violation of the Sherman Act, which outlines the monopolization of economic activity. To be more specific - it concerned the monopolization of the stablecoin market, because Bitfinex was supposed to have as much as 80% of all resources in its hands. In general, the exchange and Tether were supposed to increase and decrease Bitcoin's price and conduct money laundering in an organized way.

"Tether issued extraordinary amounts of unbacked USDT to manipulate cryptocurrency prices. Because the market believed the lie that one USDT equaled one U.S. dollar, Bitfinex and Tether had the power to, and did, manipulate the market on an unprecedented scale to profit from boom-and-bust cycles they created."

What is more, the exchange is believed to be responsible for embezzling a total amount of $1.4 trillion.

Rate post

Your vote has already been added.
Rating: 5 from 5
Ratings: 1