Judge Catherine Polk Failla of the federal district court for the Southern District of New York dismissed half of the class action claims against Tether and Bitfinex, including all claims under the RICO Act.
NY Court dismisses half of class action plaintiffs' claims against Tether: https://tether.to/ny-court-dismisses-half-of-class-action-plaintiffs-claims-against-tether/… We are grateful for Judge Failla's opinion, which exposed many deficiencies in the plaintiffs' case.
In October 2019, a group of investors filed a lawsuit. It accused Tether, Bitfinex and a number of top company executives of violating the US Commodity Exchange Act, the RICO Act, money laundering, Pump & Dump schemes, market manipulation by issuing USDT and deliberately defrauding investors.
The total claims against the defendants then exceeded $1.4 trillion.
According to the statement, for the remaining claims, the court raised "significant issues that will ultimately be fatal for the plaintiffs".
"Now that half of their case has been dismissed, the lead expert has been rebutted, and their leading law firm is embroiled in its own internecine war, with its current and former partners exchanging allegations of fraud and ethics violations, this case is doomed," the defendants said.
They said they will continue with the litigation and have no intention of settling the remaining claims.
Bitfinex lawyers had previously called the lawsuit baseless and pointed out that it was based on a 2017 bitcoin rally study, which contained "methodological flaws".
In September 2020, Tether and Bitfinex filed a motion to dismiss the lawsuit.
Recall that in February 2021, the companies settled with the New York State Attorney General's Office for financial transactions involving the loss of $850 million. The defendants agreed to pay a fine of $18.5 million, without admitting wrongdoing.
The settlement was facilitated by Bitfinex's repayment of a $750 million loan from Tether, which triggered the prosecutor's claims.