Amended Complaint: Tether's USDT Not Backed by Dollars, Plaintiffs Say

The complaint, filed in the Southern District of New York, alleges that Tether and Bitfinex manipulated cryptocurrency prices, including Bitcoin (BTC), by injecting unbacked USDT into the market, contrary to Tether's claims of one-for-one backing with US dollars.

The plaintiffs assert that this scheme led to financial losses and damages for investors, forming the basis of their accusation that Tether and Bitfinex violated the Commodities Exchange Act (CEA) and the Sherman Act.

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This amended complaint marks the third iteration of the lawsuit, initially filed in 2019. In December 2023, Tether and Bitfinex opposed the second amendment attempt, calling it a desperate move to salvage a weak case. The defendants argued:

Plaintiffs' Motion to Amend is in reality a motion for leave to start over <..>. The reason for this dramatic change of course is clear: two years of fact discovery <...> have not revealed a single shred of evidence supporting the market manipulation scheme alleged in the Amended Complaint.

The outcome of this case could have significant implications for the crypto industry, especially regarding the practices of stablecoin issuers and their impact on market stability and investor trust. As the legal battle continues, both sides remain entrenched in their positions, awaiting further developments.

In other news, last month, Tether's new platform, Alloy by Tether, introduced aUSDT, a token over-collateralized by Tether Gold (XAUt) and pegged to the US dollar.

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