Bitfinex & Tether Class Lawsuit Revised; Adding Bittrex and Poloniex to Alleged Manipulation

  • Revised lawsuit on Bitfinex’s alleged price manipulation of the market using Tether (USDT) during the 2017 bull run to $19,800 has added two U.S based cryptocurrency exchanges
  • US Based Bittrex Exchange and Justin Sun owned, Poloniex
  • Bitfinex still claiming they are “false allegations”

According to a recently revised class action lawsuit filing to the U.S. Southern District Court of New York, Bittrex and Poloniex are the recent defendant additions to alleged charges on supposedly manipulating the Bitcoin market using unbacked Tether (USDT) stablecoins back. The plaintiffs claim the Bitfinex Inc. and its affiliated companies caused billions of losses to traders from the manipulation.

The filing claims that if BitFinex, Bittrex, and Tether would not have manipulated the market, the sharp rise is seen at the end of 2017 and the successive year-long bloodshed would not have happened at such proportions. Multiple class lawsuits arose from the case claiming BitFinex Inc. and its ring of exchange affiliates enabled the printing of billions of dollars of USDT and artificial pumping of BTC and the altcoin market.

The lawsuits were merged into one last year and have now revised it to include Poloniex and Bittrex – also allegedly involved in the manipulation of markets. The lawsuit states,

“Bittrex and Poloniex accepted these transfers and knowingly allowed Bitfinex and Tether—as owners of the addresses holding the USDT—to sell the debased USDT for crypto-commodities on their exchanges, driving up the crypto-commodity prices.”

According to the original filing, BitFinex and Tether were accused of printing USDT and using the stablecoins to boost the prices of at least $1 trillion USD in different crypto assets. The NY federal court shut down efforts by BitFinex to dismiss the class-action lawsuit in November and the second lawsuit in the US Court for the Western District of Washington was opened a fortnight later.

Two plaintiffs have been dropped from the case, David Leibowitz and Global Trades Solution AG, both of whom were represented in the original filing. The new filing also includes Matthew Script as a new plaintiff alongside Benjamin Leibowitz, Jason Leibowitz, Aaron Leibowitz, and Pinchas Goldshtein.

BitFinex and Tether Denounces the Lawsuit

BitFinex and its sister company, Tether released a statement on June 4, 2020, claiming the lawsuits filed with the U.S District court are “false allegations”. Stuart Hoegner, General Counsel for Bitfinex said the lawsuit claims causation due to a correlation between the USDT demand growth and BTC price surge. Hoegner further said,

“This meritless lawsuit is an insult to the ingenuity of Tether’s customers, as well as the success and innovation of the industry and all who play a role in it.”

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Author: Lujan Odera

Binance Adjusts Its Fee Structure To Entice Market Makers To Increase Futures Liquidity

The largest cryptocurrency exchange in the world in terms of volume, Binance, has revised its fee program in efforts to reward market makers for increasing futures liquidity CoinDesk reports.

In an official press statement released on Monday, Binance revealed that market makers for the Futures program will be awarded a negative fee for various trading pairs. The statement describes a market maker as a user who increases liquidity through purchasing and selling limit orders where the limit prices being either higher or lower than the prevailing market price. In other words, a market maker is a user who removes liquidity from the market via filling a previously placed.

Crypto exchanges in most instances, come up with different techniques to increase liquidity within their platforms by providing makers reduced fees in comparison to the ones given to takers when they are filling an order.

Binance did not reveal the details of the negative fee program. However, for a user to be part of the program, they must have more than 1,000 BTC trading volume for the last 30 days on the Binance platform. The announcement also indicates that one must have ‘quality market maker strategies’. In addition, Binance says it will approve proposals that are backed with proof of such trading volumes in different exchange platforms.

The exchange also stated that a performance review will be enforced routinely and will be based on various aspects like market making time, order duration, bid/offer spread as well as the total order size.

The new strategy by Binance can be seen as a plan to deal with intense competition in the derivatives market. In the recent past, both Intercontinental Exchange’s Bakkt as well as Chicago Mercantile Exchange (CME) rolled out Bitcoin options having offered futures contracts.

Since its introduction in September 2019, Binance Futures has witnessed a rapid growth with January’s futures volume increasing by 85% after $56 billion was traded on the platform’s perpetual contract markets.

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Author: Joseph Kibe