Plaintiffs accuse Tether and Bitfinex of using USDT to manipulate crypto prices

[Husires]

In a surprising development, plaintiffs in a long-standing class-action lawsuit have accused Tether and Bitfinex of engaging in a misleading scheme to manipulate cryptocurrency prices.
What’s the allegation all about?

The amended complaint alleges that the companies used USDT, Tether’s dollar-backed stablecoin, to artificially influence market dynamics.

In simple words, plaintiffs alleged Tether and Bitfinex used billions of dollars in USDT to buy cryptocurrencies. However, contrary to Tether’s claims that each USDT was backed one-to-one by U.S. dollars, the Plaintiffs argue this was not the case.

https://ambcrypto.com/tether-bitfinex-accused-of-market-manipulation-whats-going-on/

Plaintiffs' accusations that this manipulation constitutes a violation of both the Commodity Exchange Act (CEA) and the Sherman Antitrust Act, which began in 2020, illustrate the ongoing legal challenges and complexities, but I believe some of it is true, but it will be difficult to prove legally.

[Kemarit]

I have nothing against Tether and Bitfinex, but you have to question the timing of this so called alleged allegations against them. I mean yeah they could have been doing this for years.

But when we are about to make a break out run to let's say $68,000-$70,000 (assuming there is no Mt. Gox repayment in the background), you just have to think of this as somewhat more of a FUD, IMHO.

And usually if there is such FUD, the market might make a big move.

[MrSpasybo]

Plaintiffs' accusations that this manipulation constitutes a violation of both the Commodity Exchange Act (CEA) and the Sherman Antitrust Act, which began in 2020, illustrate the ongoing legal challenges and complexities, but I believe some of it is true, but it will be difficult to prove legally.

Similar accusations have been made in the past, but no one has yet been able to sue Tether and Bitfinex for their actions during the bullrun 2017. Conspiracy theories allege that Bitfinex printed billions of USDT out of thin air to buy BTC in order to pump BTC price and the entire crypto market, but no one has enough evidence to charge Bitfinex.

In recent financial reports, Tether's reserve evidence has been quite good and reliable. Tether remains a giant in the stablecoin sector and the crypto market. I think weak FUD news like this cannot affect the position and strength of Tether and USDT.

[pakhitheboss]

I won't be surprised if they settle this new case out of court by paying some amount in millions. They did the same thing in 2019 when the New York attorney general alleged that Bitfinex covered up an $850 million hole in its reserves by using funds from Tether. Tether has been a controversies since its inception as a stable coin in the cryptocurrency market.

[Husires]

In recent financial reports, Tether's reserve evidence has been quite good and reliable. Tether remains a giant in the stablecoin sector and the crypto market. I think weak FUD news like this cannot affect the position and strength of Tether and USDT.

I doubt that, it is the most liquid and most valuable asset so it will not collapse quickly or if a real event occurs, but if investors start selling USDT, it is a matter of time before everything collapses.
Compared to other stablecoins, USDT is in a better position and it will be difficult to challenge them legally.

[dkbit98]

This is not the first time we see Tether and Bitfinex being accused for market manipulations, and I think at one point regulators are going to try and shut them down because of this.
My best guess is they are allowing them to operate while they are collecting all the evidence they need to create a big lawsuit against them.
That is why Bitcoin has a big advantage, no owner, no face representative and no company behind bitcoin.

[MrSpasybo]

I doubt that, it is the most liquid and most valuable asset so it will not collapse quickly or if a real event occurs, but if investors start selling USDT, it is a matter of time before everything collapses.
Compared to other stablecoins, USDT is in a better position and it will be difficult to challenge them legally.

As long as Tether always has enough assets to back all USDT on the market and ensures the minting and burning of USDT, the price of USDT will continue to be pegged to the USD in all cases, even if everyone sells off USDT on the market. If a sell-off occurs, I think the USDT price will only drop to $0.95 and will quickly recover.

In the event that Tether collapses and the crypto community becomes aware that each USDT on the market is not backed by an asset worth $1 in Tether's reserves, USDT will quickly depeg. However, I doubt this possibility because Tether is making a lot of profit from many areas such as accumulating BTC, mining BTC, and supporting AI.

[Cech1337]

In a surprising development, plaintiffs in a long-standing class-action lawsuit have accused Tether and Bitfinex of engaging in a misleading scheme to manipulate cryptocurrency prices.
What’s the allegation all about?

The amended complaint alleges that the companies used USDT, Tether’s dollar-backed stablecoin, to artificially influence market dynamics.

In simple words, plaintiffs alleged Tether and Bitfinex used billions of dollars in USDT to buy cryptocurrencies. However, contrary to Tether’s claims that each USDT was backed one-to-one by U.S. dollars, the Plaintiffs argue this was not the case.

https://ambcrypto.com/tether-bitfinex-accused-of-market-manipulation-whats-going-on/

Plaintiffs' accusations that this manipulation constitutes a violation of both the Commodity Exchange Act (CEA) and the Sherman Antitrust Act, which began in 2020, illustrate the ongoing legal challenges and complexities, but I believe some of it is true, but it will be difficult to prove legally.

[Husires]

In the event that Tether collapses and the crypto community becomes aware that each USDT on the market is not backed by an asset worth $1 in Tether's reserves, USDT will quickly depeg. However, I doubt this possibility because Tether is making a lot of profit from many areas such as accumulating BTC, mining BTC, and supporting AI.

It is built on trust just like FIAT money and even if the peg is broken I don't think investors will lose confidence in USDT quickly and this happened with USDC.

What I fear most is Tether's mismanagement of the token and printing millions for quick profit, if this happens the collapse will be quick and there will be panic, this panic and panic is enough to break the peg no matter how much liquidity is available.

[Manna]

This is not the first time we see Tether and Bitfinex being accused for market manipulations, and I think at one point regulators are going to try and shut them down because of this.
My best guess is they are allowing them to operate while they are collecting all the evidence they need to create a big lawsuit against them.
That is why Bitcoin has a big advantage, no owner, no face representative and no company behind bitcoin.

There is no one behind vitcoin Bitcoin itself moves at its own pace Bitcoin price fluctuates over trading and investing.  I agree with you.  Bitcoin is a very powerful coin.  No owner controls it and it runs on its own.

[MrSpasybo]

It is built on trust just like FIAT money and even if the peg is broken I don't think investors will lose confidence in USDT quickly and this happened with USDC.

What I fear most is Tether's mismanagement of the token and printing millions for quick profit, if this happens the collapse will be quick and there will be panic, this panic and panic is enough to break the peg no matter how much liquidity is available.

USDC once lost its peg due to instability in liquidity through traditional banks, unrelated to Circle's reserve proof. Tether has not faced this and we have never experienced a severe USDT de-peg.

Tether has become very strong in the crypto market thanks to its reserves of US Treasury bonds, mining BTC, and investing in many hot sectors of the economy. Tether does not hold shitcoins or memecoins to support USDT on the market, so I think we can rest assured because the total value of Tether's assets is greater than the USDT marketcap in circulation.

[Husires]

What I fear most is Tether's mismanagement of the token and printing millions for quick profit, if this happens the collapse will be quick and there will be panic, this panic and panic is enough to break the peg no matter how much liquidity is available.

Tether has become very strong in the crypto market thanks to its reserves of US Treasury bonds, mining BTC, and investing in many hot sectors of the economy. Tether does not hold shitcoins or memecoins to support USDT on the market, so I think we can rest assured because the total value of Tether's assets is greater than the USDT marketcap in circulation.

Since they can't prove that the token printing is not 1:1 of the assets they have (treasury bonds, cash, assets, Bitcoin), what guarantees the price is the confidence that Tether will meet its obligations and that the price will always remain near $1, but if the peg is broken, even if it is due to the loss of stability in liquidity through traditional banks as happened with Circle and this continues for several days, the result will be a collapse. Panic can lead to anything bad in the economy.

[Wiseman]

Plaintiffs' accusations that this manipulation constitutes a violation of both the Commodity Exchange Act (CEA) and the Sherman Antitrust Act, which began in 2020, illustrate the ongoing legal challenges and complexities, but I believe some of it is true, but it will be difficult to prove legally.

Similar accusations have been made in the past, but no one has yet been able to sue Tether and Bitfinex for their actions during the bullrun 2017. Conspiracy theories allege that Bitfinex printed billions of USDT out of thin air to buy BTC in order to pump BTC price and the entire crypto market, but no one has enough evidence to charge Bitfinex.

In recent financial reports, Tether's reserve evidence has been quite good and reliable. Tether remains a giant in the stablecoin sector and the crypto market. I think weak FUD news like this cannot affect the position and strength of Tether and USDT.

I completely agree with you. It can be compared to someone trying to hit the sky with a hammer. Nothing will happen. And the fact that they brought charges is just some kind of PR or something like that.

[Manna]

Plaintiffs' accusations that this manipulation constitutes a violation of both the Commodity Exchange Act (CEA) and the Sherman Antitrust Act, which began in 2020, illustrate the ongoing legal challenges and complexities, but I believe some of it is true, but it will be difficult to prove legally.

Similar accusations have been made in the past, but no one has yet been able to sue Tether and Bitfinex for their actions during the bullrun 2017. Conspiracy theories allege that Bitfinex printed billions of USDT out of thin air to buy BTC in order to pump BTC price and the entire crypto market, but no one has enough evidence to charge Bitfinex.

In recent financial reports, Tether's reserve evidence has been quite good and reliable. Tether remains a giant in the stablecoin sector and the crypto market. I think weak FUD news like this cannot affect the position and strength of Tether and USDT.

I completely agree with you. It can be compared to someone trying to hit the sky with a hammer. Nothing will happen. And the fact that they brought charges is just some kind of PR or something like that.

Your comparison is absolutely correct.  Just as nothing changes when one tries to hit the sky with a hammer, some complaints or actions do not really have much effect.  It can often be a PR stunt or an attempt to attract public attention, where the main goal is to generate discussion rather than effective change. Such actions usually do not solve real problems or bring about significant change.  This may be essentially a demonstrative move, where virtually nothing is achieved.  Your approach clearly highlights the limitations of such efforts.

[Wiseman]

Your comparison is absolutely correct.  Just as nothing changes when one tries to hit the sky with a hammer, some complaints or actions do not really have much effect.  It can often be a PR stunt or an attempt to attract public attention, where the main goal is to generate discussion rather than effective change. Such actions usually do not solve real problems or bring about significant change.  This may be essentially a demonstrative move, where virtually nothing is achieved.  Your approach clearly highlights the limitations of such efforts.

This is essentially like a knight's move when you need to pump or dump the entire market, some one piece of news now has practically no effect on the market, but news like this and a series of them can strongly influence the market and bring the rate down to the desired values, everyone is corrupt and everyone can be bought, and when we talk about market manipulation, all methods are good.