Tether has a firm position in the cryptocurrency market. Along with other spot-trading platforms, this digital currency uses Bitfinex to exchange with other digital currencies. However, the recent lawsuit by Roche Freedman reported the whole process was fraudulent to both manipulate the market and cheat the investors.
According to the allegation, Tether was not backed by the US dollar as it was advertised. Moreover, the digital asset company flooded the Bitfinex platform to purchase other cryptocurrencies. Later on, Tether created an artificial demand to spike its price in the platform.
An excerpt from the lawsuit mentioned that the Tether’s claim of one USDT equals one USD was a lie and the investors were tricked to believe the claim. This claim manipulated the digital currency market on a massive scale and Tether made a huge profit from their boom-and-bust cycle.
Despite the lawsuit, Tether minted two large transactions of $12 million and $20 million each. These trades may add some strength to the market manipulation acquisition as historically massive minting of USDT is correlated with the price hike of Bitcoin.
Tether and Bitfinex knew about the upcoming allegations. Therefore, they already published a warning for the investors about some “baseless acquisitions” about them long before the lawsuit. How insightful is that?