How Severe Is Roche Freedman's Lawsuit Against Tether and Bitfinex?

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At the start of October, New York-based legal firm Roche Freedman filed a new class-action lawsuit against stablecoin firm Tether and digital currency exchange Bitfinex.

As per the lawsuit, the legal team over at Roche Freedman has argued that Tether's claim of all its Tether tokens being backed by equal amounts of United States dollars is a blatant lie.

"Because the market believed the lie that one USDT equaled one U.S. dollar, Bitfinex and Tether had the power to, and did, manipulate the market on an unprecedented scale to profit from boom-and-bust cycles they created."

A few days before the lawsuit was made public, representatives for Tether and Bitfinex issued separate statements claiming that they had gotten wind of an unreleased paper that was falsely accusing them of manipulating the cryptocurrency market.

"US Federal Courts have a Rule 11 in Civil Procedure that requires all pleadings to be filed with a court have a reasonable basis in law and fact. If they do not, then the person who filed the pleading is subject to sanctions by the Court and/or the other party subjected to these false claims. So filing a lawsuit for visibility would be a very expensive marketing ploy if there is no basis to the claims brought by a plaintiff, such as Roche Freedmen."

If any information that corroborates these claims becomes public in the near future, then Bitfinex and Tether will most likely experience some real reputational damage.

Will the lawsuit affect Bitfinex's and Tether's market reputation?A pertinent question that naturally arises as a consequence of these recent developments is whether or not Roche Freedman's latest lawsuit will irrevocably damage Bitfinex and Tether's market reputation.

"The only ramification I envision is a transfer of funds to a coterie of high-priced attorneys' bank accounts; trading on Bitfinex will continue unabated and Tether will continue to be volatile, with or without Roche Freedman's help. When the suit is dismissed or lost and all of this blows over, it will be as futile as Harry Markopolos' ill-fated 'exposé' of General Electric: a tale told by an idiot, full of sound and fury, signifying nothing."

He told Cointelegraph that he is not at all surprised that a class-action lawsuit has been brought forth against both Tether and Bitfinex - especially considering the legal pursuit these entities have been facing by the New York attorney general over the past year or so.

"Any litigation or class action lawsuit could shed negative light on a company regardless of industry. I don't think that a single class action will have a material effect on the public's perception on Tether or Bitfinex. Companies in the U.S. get sued often, we live in a litigious society, but unless they succeed in their case with the New York Attorney General, it is unclear if they will be able to rebound."

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