iFinex, the issuing firm behind the Tether cryptocurrency and Bitfinex, has been granted motions to dismiss five complete claims as well as a part of one, while six other claims remain denied.
The dismissals are part of an ongoing class action suit levelled against the firm in which Tether is facing charges on alleged violations of the Racketeer Influenced and Corrupt Organizations Act (RICO). Southern District of New York Judge Katherine Polk Failla deems that the complaints filed by previous Tether and Bifinex investors could not “inadequately allege” how Tether has a monopolistic practice or presence in the stablecoin market.
“This case is doomed. Even for the remaining claims, the Court’s order raises substantial issues that will ultimately be fatal to the plaintiffs’ case.” Tether said in a statement.
Prior news has revealed how Tether executives are embroiled in a bank fraud investigation conducted by the DOJ. This latest development from Tether is in line with an earlier initial complaint against iFinex made in October 2019, in which allegations that the firm manipulated the crypto space and its individual investors by means of the issuance of unbacked Tether ($USDT).
The prior complaint outlines how Tether’s allegedly unbacked stablecoins provided an uncalled-for signal to the market “that there was enormous, organic demand for cryptocommodities” which, as such, was responsible for “creating and sustaining a ‘bubble’ in the cryptocommodity market.”
In response to this, Tether and Bitfinex reached an $18.5 million settlement with the New York Attorney General’s Office. While this case has been settled, the civil class action lawsuit with a number of previous Tether investors continues to escalate.
“Bitfinex and Tether look forward to litigating this case and won’t settle what remains of the plaintiffs’ baseless claims. Litigation will expose this case for what it is: a clumsy attempt at a money grab, which recklessly harms the whole cryptocurrency ecosystem.” Tether adds.
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