Bitfinex And Tether In Troubled Waters Again; Bittrex and Poloniex Follow Suit

By Sahana Kiran
Published June 4, 2020 Updated June 4, 2020
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Lawsuit against crypto exchanges
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Bitfinex And Tether In Troubled Waters Again; Bittrex and Poloniex Follow Suit

By Sahana Kiran
Published June 4, 2020 Updated June 4, 2020

Bitfinex and Tether continue to face trouble as the platforms have been slapped with an updated lawsuit for the 2017 crypto market manipulation. Along with formerly accused, two other popular exchanges, Poloniex and Bittrex have been accused of participating in the manipulation in the amended lawsuit.

Poloniex And Bittrex Join The List

Recently, the largest stablecoin, Tether (USDT) surpassed XRP and took its position as the third-largest coin in terms of market cap. Tether’s sister company,  Bitfinex has also onboarded many developments on to its platform. Despite, the unswerving upgrades on these platforms, trouble seems to follow them along with their parent companies.

A 156-page revised lawsuit was filed on 3 June 2020, in New York’s Southern District Court. Back in 2017, when Bitcoin hit an all-time high of $20,000, Bitfinex, as well as Tether, artificially boosted the supply of USDT further inflating the price of Bitcoin, artificially. The first lawsuit against these firms was filed back in October 2019, which demanded $1.4 trillion in total damages.


In the previous lawsuits, the defendants (accused) have been iFinex Inc., BFXNA Inc., BFXWW Inc., Tether Holdings Limited, Tether Operations Limited, Tether Limited, Tether International Limited, DigFinex Inc., Philip G. Potter, Giancarlo Devasini, Ludovicus Jan van der Velde, Reginald Fowler, and Crypto Capital Corp. The plaintiffs are, David Leibowitz  Benjamin Leibowitz, Jason Leibowitz, Aaron Leibowitz, and Pin


chas Goldshtein.

Notably, in the latest lawsuit, one of the plaintiffs David Leibowitz, a cryptocurrency trader wasn’t on the list, however, he seems to have been replaced by Matthew Script another cryptocurrency trader.

The lawsuit further alleged that USDT was being created “out of thin air” as  Tether had issued “billions” of USDT with no USD backing. The filing further read,

“Tether hid that fact by “selling” newly issued USDT to Bitfinex, a crypto-exchange that was secretly owned and operated by the same individuals who owned and operated Tether.”


Apart from the above-mentioned entities, two other prominent exchanges in the crypto-verse, Bittrex, and Poloniex were also accused of engaging in the 2017 market manipulation. The lawsuit claimed that both these platforms had willingly assisted Tether and Bitfinex to make use of the “fraudulently issued USDT.” Poloniex reportedly accomplished about $7.6 billion USDT tradings for different cryptocurrencies every month. The filing stated,

“Bitfinex and Tether were able to maintain the illusion that USDT was fully backed with the assistance of shadow banks, including Crypto Capital, a shadow bank that Fowler operated, which ensured that Bitfinex and Tether had access to U.S. correspondent banks and thus could exchange U.S. dollars in response to requests from legitimate customers as needed.”

Despite enduring immense economic losses, a plaintiff continues to trade. Pinchas Goldshtein has reportedly bought 629 Bitcoin futures positions, amid 16 January 2018, and 3 June 2020.

However, unlike the previous lawsuits, the plaintiffs petitioned that the Court enter a judgment against the defendants and favor the plaintiffs with relief for “actual damages, treble damages, injunctive relief, interest, reasonable expenses, and attorneys’ fees.”

While the plaintiffs haven’t given a specific number in the revised lawsuit, they have demanded a trial by the jury for all the claims.


The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Sahana Kiran
133 Articles
Sahana Kiran is a graduate in Political Science, Economics and Journalism. She is a full-time crypto writer at CoinGape and takes a keen interest in cryptocurrencies, especially Ethereum and Bitcoin. Even though she's not a HODLER yet, she has eyes on Bitcoin.