Another two major cryptocurrency exchanges – Bittrex and Poloniex – have been summoned to the court in connection to their involvement in the Bitcoin price manipulation in the 2017 bull run.
The June 3 filings were made by the same plaintiffs who dragged Bitfinex and Tether to court last October for artificially inflating the price of Bitcoin.
The Most Diverse Audience to Date at FMLS 2020 – Where Finance Meets Innovation
“A lawsuit has been filed against you,” the summon notice read.
Per the lawsuit, Tether issued billions of USDT without backing them with the US dollar and purchased Bitcoin from the spot market, thus pushing the demand of the digital currency.
“Tether issued billions of USDT to itself with no U.S. dollar backing— simply creating the USDT out of thin air,” the updated court filing noted. “Because Bitfinex and Tether were essentially the same, Tether could simply transfer newly issued USDT into its account on Bitfinex without receiving U.S. dollars in exchange, as was required from genuine customers.”
Though in the initial filling only Tether and its sister exchange Bitfinex were named, now the plaintiffs added two more exchanges in the updated filings submitted on Wednesday.
“With the willing assistance of Bittrex, Inc. (“Bittrex”) and Poloniex LLC (“Poloniex”), two other crypto-exchanges, Bitfinex and Tether used fraudulently issued USDT to make strategically timed, massive purchases of crypto commodities just when the price of those commodities was falling,” the filing added.
Notably, Pinchas Goldshtein, one of the five plaintiffs, is still trading digital assets and purchased 629 Bitcoin futures contracts between January 16, 2018, and June 3, 2020.
The crypto companies are bombarded with lawsuits
Bitfinex was also facing another class-action lawsuit filed weeks after the first one with similar allegations of market manipulation.
Meanwhile, many other major crypto exchanges are also facing class-action lawsuits for various reasons.
Earlier this year, exchanges like Binance and BitMEX were named at 11 class-action lawsuits filed in the US alleging them for violating federal securities laws and mislead investors into buying unregistered assets.