Court Rejects Half of Claims Against Tether and Bitfinex in $1.4 Trillion Class-Action

Judge Failla dismisses half the class-action claims, including RICO.

Judge Kathryn Polk Failla of the U.S. District Court for the Southern District of New York rejected half of the claims against Tether and Bitfinex in the class action, including all claims under RICO.

NY Court dismisses half of class action plaintiffs’ claims against Tether: https://t.co/FEHUvMhyfa

We are grateful for Judge Failla’s opinion, which exposed many deficiencies in the plaintiffs’ case.

— Tether (@Tether_to) September 29, 2021

In October 2019, a group of investors filed suit. They accused Tether, Bitfinex and a number of the company’s senior executives of violating the United States Securities Exchange Act, the RICO Act, money laundering, Pump & Dump schemes, market manipulation through the issuance of USDT and intentional investor deception.

The total amount of the claims against the defendants then exceeded $1.4 trillion.

According to the statement, the court raised “substantial questions that will ultimately be fatal to the plaintiffs”.

“Now that half of their case has been dismissed, the lead expert discredited, and their leading law firm embroiled in its own internecine war, in which its current and former partners trade accusations of fraud and ethical violations, the case is doomed,” the defendants said.

They said they would continue the litigation and would not settle the remaining claims.

Bitfinex lawyers had previously termed the suit unfounded and noted that it was based on the 2017 Bitcoin rally study that contains “methodological flaws”.

In September 2020, Tether and Bitfinex filed a motion to dismiss the suit.

In February 2021, the companies settled with the New York Attorney General’s Office a matter concerning financial operations tied to the loss of $850 million. The defendants agreed to pay a fine of $18.5 million, without admitting wrongdoing.

The settlement was aided by the repayment of a $750 million loan Bitfinex had taken from Tether, which had prompted the prosecutors’ claims.