Crypto Giant Bitfinex Vigorously Disputes ‘Meritless and Mercenary’ Lawsuit

Journalist:
Ryan Smith @trendz
October 6, 2019

Cryptocurrency exchange Bitfinex announced on Saturday, Oct 5, that it expects to be prosecuted by an unknown party in a ‘meritless and mercenary lawsuit’.

The Hong Kong-based exchange which has been embroiled in a number of controversies apparently got wind of a damning report and is looking to quell any negative press ahead of its publishing.

“Bitfinex is aware of an unpublished and non-peer reviewed paper falsely positing that Tether issuances are responsible for manipulating the cryptocurrency market. Bitfinex vigorously disputes the findings and conclusions claimed by that source, which rely on flawed assumptions, incomplete and cherry-picked data, and faulty methodology.”

The Bitfinex Saga Continues

Bitfinex has not yet disclosed the source of the claim, however, a number of studies have emerged suggesting that newly-minted Tethers tend to prop up the Bitcoin price.

TokenAnalyst study suggest newly-minted Tethers prop up the Bitcoin price | Source: Twitter

The cryptocurrency exchange is still involved in a lengthy legal battle with the New York Attorney General’s office and has until Oct. 14 to produce documents proving its innocence.

Bitfinex’s legal dramas are set to continue, this time from plaintiffs pursuing a quick ‘money grab’.

“We fully expect mercenary lawyers to use this deeply flawed paper to solicit plaintiffs for an opportunistic lawsuit… In advance of any filing, we want to make clear our position that any claims based on these insinuations are meritless, reckless and a shameless attempt at a money grab.”

A Massive Rise In Market Capitalization Since 2017

The Tether token, one of many so-called stablecoins, claims to mirror the U.S. dollar. Many question its peg to USD considering how significantly the dollar has declined in recent years.

The company that issues USDT’s, Tether Limited, is a separate entity from the Bitfinex exchange, however, speculation runs rife that the two are, in fact, colluding.

Since July of 2017 Tether’s market cap has risen dramatically to $4.1 billion. That places it fourth in the CoinMarketCap capitalization rankings.

A massive increase in market capitalization for Tether since July 2017 | Source: CoinMarketCap

Bloomberg reported recently that Tether had even overtaken Bitcoin in daily trading volumes.

Tether Reserves Still a Questionable Bone of Contention

Bitfinex rounded off its statement by re-affirming that all USDT’s are fully backed:

“All Tether tokens are fully backed by reserves and are issued and traded on Bitfinex pursuant to market demand, and not for the purpose of controlling the pricing of crypto assets.”

The statement is inconsistent with Tether’s own legal representation who earlier this year claimed that each token is only backed by $0.74 worth of reserves.

This article was edited by Samburaj Das.

Ryan Smith @trendz

Ryan is a web designer, writer, and trader who hails from sunny South Africa. He eats, breathes and lives crypto. With experience following the FX market and a keen interest in the history and evolution of money, Ryan is always trying to understand the bigger economic picture. When not meticulously looking over the charts, he can be found planning his next road trip or running around a 5-a-side soccer field. Twitter LinkedIn