Yesterday afternoon Judge Catherine File in the southern district of the New York courthouse heard statements from three groups of plaintiffs that iFinex et. To sue. Or. and compete to serve as lead counsel in an emerging class-action lawsuit with potential tens of thousands of affected members.
IFinex’s Tether (USDT) stablecoin company and its Bitfinex subsidiary are in charge of manipulating the Bitcoin market in 2017 – something that the company strongly denies.
Kyle Roche, representative of plaintiffs Leibowitz et. al., argued that his company Roche Cyrulnik Freedman LLP was the first to investigate the alleged market manipulation, the first to file a complaint, and also have the top cryptocurrency expertise. “Cryptocurrency is unique,” Roche said, “the law is new and this case presents difficult definition issues.”
The case should not be limited to Bitcoin problems alone, he said; it must contain other cryptocurrencies, such as Ether, that may have been damaged by the alleged pump-and-dump scheme.
“Cryptocurrency really works as one market. People who buy a cryptocurrency often buy a lot, especially in a bubble “as happened in the summer of 2017, Roche said. He referred to page 43 of the so-called Griffin paper and cited it as evidence.
The academic paper, Is Bitcoin really not bound? by John M. Griffin and Amin Shams, was posted in June 2018 and later updated. It investigated whether Tether affected Bitcoin and other cryptocurrency prices during the 2017 boom. The authors discovered that those purchases with Tether were timed after market cuts and resulted in “significant increases in Bitcoin prices.” This article became a fundamental piece of research for all four consecutive lawsuits.
Many in the crypto community have long been skeptical that Tether is actually supported by the US dollar in a one-to-one ratio as claimed. The Griffin document also found “insufficient Tether reserves before the end of the month.”
The Griffin paper showed, Roche said, that the price of Bitcoin had fallen before the issue of Tether, but after Tether was issued, the price of Bitcoin went up – and this also happened with six other crypto currencies.
Karen Lerner of Kirby Mcinerney LLP, representative claimants ’Young, Kurtz, Crystal et. al., argued that a different kind of experience was more important in such an action. “We are class action lawyers and we are antitrust and commodity lawyers.” And, she argued, although they were not the first to file a complaint, their work was the most original, with an extensive regression analysis that identified 115 specific dates on which market manipulation took place and 256 actual transactions. Their proprietary algorithm would demonstrate “a lock-step price ratio between Bitcoin spot and Bitcoin futures,” she argued.
Brian Cochran, lawyer at Robbins Geller, representative of plaintiff Ebanks et. al., doubted the unique crypto expertise of the Roche company. “He says that his only crypto case in Florida gives them more expertise than my two crypto cases – those were class actions.”
Perhaps more importantly, Cochran was the class size proposed by the other law firms. “Roche defined it as someone who owned crypto in the past six years. That is an exaggeration – far too wide. Bitcoin and Bitcoin futures come closer to my definition of the class. Not all cryptos must be included. “That would simply take money from real victims and give it to others.
As one might see, many lawyers were present for the oral arguments: 12 lawyers represented the four claimants, while the defense team sent three lawyers only to observe – with room for a premium, several lawyers had to sit on the jury. As the session drew to a close, Judge Failla said, “I had hoped to decide on the motion today, but you made my decision very difficult.” She promised a decision on Thursday at 4:00 PM EST
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