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Tether Scores Major Legal Win in Trillion Market Manipulation Case
Market manipulation by significant exchanges throughout the world has been a critical issue for most crypto traders. More so, the underdogs in the crypto industry are at a wild toll. Crypto whales only require to move a massive amount of crypto to determine how the marketing strategies go. Recently, Tether and Bitfinex found themselves in a spot concerning the same.
Both blockchains have been in a fix. The two professors acting as plaintiffs declared their lawsuit against Tether and Bitfinex for market manipulation. Also, they believe that these orders would have otherwise crippled both blockchains.
However, recently the court dismissed half of the plaintiffs’ claims brought in front of the court. Furthermore, Tether and Bitfinex have managed a $1 trillion win on the court case. Now, all that’s missing is the confirmation that both blockchains have not been part of the ongoing manipulation claims. In that case, what do we have to say about the constant conviction against Tether? Stay tuned to get my opinion.
The Market Manipulation Allegations
The authorities filed this case against Tether and Bitfinex back in 2019 for extensive market manipulation. The two platforms faced claims of issuing unregistered USDT tokens to control the markets. As a result, it allegedly led to traders losing over 1 trillion in US dollars. According to both platforms, this move was a poor attempt at defaming their steps to protect the markets from bad outcomes.
Both went to Twitter to defend the claims presented before the Southern District of New York court on 7 October 2019. The two plaintiffs published a paper suggesting Tether and Bitfinex’s steps to manipulate Bitcoin’s prices.
The case has been ongoing for the past two years, being the second accusation both platforms face. In 2018, the DOJ looked into other claims concerning the exact charges.
The companies used the profits to buy BTC to boost the king coin’s prices. Moreover, they stated that a part of USDT tokens in circulation was not USD backed in its reserves. Bitfinex clearly indicated that all USDT tokens issued on its platform are fully supported. Furthermore, it went ahead to clear its name and that of its affiliates, including its parent company, iFinex. Tether also took a step to prove its innocence by providing bank statements to support its claims of innocence.
About Tether and Bitfinex
Tether is a blockchain known for distributing the largest stablecoin globally, the USDT token. On the other hand, Bitfinex is among the most notable crypto exchanges in the market today, offering different services for traders. Both platforms are under the control of iFinex, a company based in the British Virgin Islands.
IFinex offers an extensive array of crypto-related services globally, including IEOs, trading, funding, OTC services, to mention but a few. Bitfinex stands among the top ten exchanges, with advanced trading options viable for pro traders. Under its wing are various contributors to its foundation, well-versed within the financial sector.
Court Dismisses Filed Accusations
The New York District Court recently dismissed half of the plaintiffs’ accusations, stating that there lacked enough evidence to sustain their claims. However, in February, the New York attorney general Letitia James stilled charged Tether for covering up its losses to prevent investor confidence from dwindling.
In turn, the USDT issuer had to pay up a fine of $18.5 million. Furthermore, the attorney general stated that The US dollars had not fully backed Tether in its reserve. For this, she pointed out that both platforms were not entirely without fault as they increased the risk investors would undergo. As per her Twitter post following these charges, the attorney general halted Tether and Bitfinex’s trading within New York.
The class-action case still stands to be detrimental to the platforms if the plaintiffs find enough to stand against them. At the moment, the court still states that both show an inclination to manipulation, fraud, and other actions against the Commodities Exchange Act. This conclusion comes from the plaintiffs’ extensive trading charts and examples to stand with their allegations.
Tether is grateful to Judge Katherine Polk Failla for pointing out certain loopholes in the plaintiffs’ allegations. This October, there is yet another hearing covering the second part of the case. It may either be evident Tether and Bitfinex of all charges or put them in a questionable situation.
What Does This Mean for Tether and The Crypto Market?
Considering that Tether is one of the most respected and traded digital currencies in the crypto market, Tether defends its name in a manipulation case. Additionally, half the charges have been nullified does not mean that the platform is entirely out of the rocky grounds.
On the other hand, the same actions could halt all trading on Bitfinex within the US. Considering the large user base that the country presents, this would be a disaster for the platform. Nonetheless, the case points favor Bitfinex and Tether, following the judge’s reaction to the claims.