A U.S. federal court recently permitted a class action lawsuit against Tether and Bitfinex to proceed. Investors allege that the two companies artificially inflated the prices of Bitcoin and Ethereum during the 2017 cryptocurrency surge by creating and using new USDT tokens.
Tether, Bitfinex Crypto Case Moves Forward
A New York federal judge has allowed a large group of investors to move forward together with their lawsuit against Tether and Bitfinex. Judge Katherine Polk Failla’s decision means these investors won’t have to file separate lawsuits; they can proceed as a class action.
To make the case easier to handle, the judge separated the plaintiffs into two groups. One group consists of investors who purchased cryptocurrencies directly on the market, and the other group is made up of traders who used futures contracts.
Tether. The largest financial fraud in history.
You’re welcome.
— Bitfinex’ed Κασσάνδρα (@Bitfinexed) March 6, 2026
This ruling doesn’t decide if the companies did anything illegal, but it does mean the case can continue with more legal action.
Lawsuit Claims USDT Were Issued To Manipulate BTC & ETH Price
Investors are alleging that between 2017 and 2019, a significant number of Tether (USDT) tokens were created without sufficient reserves to support them. They claim these tokens were then used to purchase Bitcoin and Ethereum, artificially inflating prices and potentially creating a market bubble.
The people bringing the lawsuit claim the manipulation artificially inflated prices during the major price increases of 2017.
After the market declined, many investors lost significant amounts of money. It’s estimated that the suspected manipulation could have resulted in billions of dollars in losses throughout the cryptocurrency market.
Tether and Bitfinex have firmly rejected the claims made against them. They state the lawsuit relies on flawed understandings of how USDT is created and traded.
What’s Next in the Tether and Bitfinex Lawsuit?
With the lawsuit officially recognized as a class action, the case will now proceed to the evidence phase, where both sides will present their arguments and information.
The court is currently examining sections of the judge’s confidential decision. Attorneys for both sides need to submit their suggestions by March 9th.
A significant decision in this case could change how stablecoins are regulated, particularly regarding transparency and how the market operates.
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2026-03-07 12:26