CRYPTO

Tether won the class action lawsuit because the court rejected Rico’s claim

The judge in a class-action lawsuit filed in the Southern District of New York against stablecoin issuer Teether and crypto exchange Bitfinex has offered to dismiss many of the lawsuits.

According to court documents filed Tuesday in New York’s Southern District, District Judge Catherine Pollock allowed Fella Tethers and Bitfinex’s parent company, iFinex, to dismiss the plaintiff’s original claim that the two companies had manipulated the crypto market. In all, Judge Fella proposed dismissing five full claims and one part, while denying the other six.

Specifically, the judge said he would not allow investors to file lawsuits against Teether and Bitfinex under the Recter-Affected and Corrupt Organizations Act, or Rico, or to accuse him of using fraudulent proceeds for racketeering or investing. He added that Tether and Bifinex investors could not “adequately complain” about the company’s monopoly power in a stable market.

“This case is ruined,” Tether said in a blog post on Wednesday. “Even in the case of the rest of the claims, the court order raises significant issues that will ultimately be fatal to the plaintiffs’ case.”

The company added:

“The lawsuit will uncover this incident because it is: an inexperienced attempt to transfer money, which recklessly damages the entire cryptocurrency ecosystem.”

Related: The BitFinex Market Manipulation case has been refilled in New York and joined the second case.

An initial allegation against iFinex in October 2019 alleges that the company manipulated the crypto market by issuing Unbacked Tether (USDT) “in an attempt to signal to the market that cryptocurrencies have a lot of organic demand.” Plaintiffs allege that the company sought to raise the price of cryptocurrencies such as Bitcoin (BTC), which created and sustained a ‘bubble’ in the cryptocurrency market.

Although Bitfinex and Tether settled their lawsuits in the New York Attorney General’s Office in February for mismanagement of the USDT Reserve Fund, civic action continues with a group of grieving crypto investors. In the former case, Bitfinex and Teether agreed to pay 18 18.5 million in damages to New York and to stop serving customers in the state, as well as submit periodic reports of their reserves.