A federal judge in the US court has approved the filing of a class action lawsuit by investors. It is against Tether and Bitfinex. The decision is a big step forwardA federal judge in the US court has approved the filing of a class action lawsuit by investors. It is against Tether and Bitfinex. The decision is a big step forward

US Court Allows Class Action Against Tether and Bitfinex

2026/03/07 15:23
4 min read
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A federal judge in the US court has approved the filing of a class action lawsuit by investors. It is against Tether and Bitfinex. The decision is a big step forward in one of the crypto industry’s longest running legal battles. On February 23, Judge Katherine Polk Failla of the U.S. District Court for the Southern District of New York. She has granted class certification to investors. Those who accuse the companies of manipulating crypto prices. 

The lawsuit claims the firms inflated the value of BTC or ETH. Between 2017 and 2019 by issuing unbacked USDT tokens. Investors say the alleged actions distorted the market. Which caused billions of dollars in losses. The ruling doesn’t decide whether Tether or Bitfinex broke the law. But it allows the case to move forward as a class action. As a result, thousands of investors could now participate in the lawsuit.

US Court Grants Class Certification With Modifications

Judge Failla approved the plaintiffs’ request under Federal Rule of Civil Procedure 23. But she granted it in a modified form. The court divided investors into two groups to manage the case more effectively. One group includes spot market investors who bought BTC or ETH directly. The second group covers traders who dealt in crypto futures markets.

The court also reviewed expert testimony linked to the case. The judge partly accepted and partly rejected attempts. To exclude the testimony of economist Dr. David W. DeRamus. Overall, the decision allows investors to pursue their claims together. Instead of filing individual lawsuits. That structure could bring thousands of participants into the case. Therefore, the potential financial exposure for the defendants could be significant.

Allegations Focus on USDT Issuance and Market Impact

The core claim centers on how USDT tokens were issued between 2017 and 2019. Plaintiffs argue that Tether created large amounts of USDT without full backing in reserves. According to the lawsuit, those tokens were then used to buy BTC or ETH. As a result, the purchases allegedly created artificial demand in the market. 

During the 2017 bull run, investors say this activity led to rising crypto prices. Many investors suffered heavy losses when prices later corrected. Plaintiffs argue that the manipulation caused billions of dollars in damages across the market. The allegations also revive old concerns about Tether’s transparency. Regulators have examined the company’s reserves several times in the past.

The lawsuit first appeared in 2019. As a consolidated class action in the Southern District of New York. Since then, the case has gone through several legal challenges. Earlier rulings dismissed some claims. Including certain racketeering accusations. But other claims survived. These include claims of common law fraud, commodities fraud and antitrust offenses. Tether and Bitfinex have repeatedly denied charges. The companies argue that the claims lack evidence. It also misrepresents how their operations work.

What Happens Next?

The case is far from finished. The court is currently handling a redaction process for the sealed opinion. Both sides must submit proposals by March 9. Then the lawsuit will likely move into further legal actions. Appeals are also possible before the case goes to trial.

But the ruling carries broader impacts. Stablecoin practices and their impact on the crypto market. Those are at the center of the dispute. As a result, industry observers are keeping an eye on matters. If the case proceeds to trial. It could set up key precedents for how courts handle. The market manipulation claims in the digital asset sector. For now, the legal battle between investors, Tether and Bitfinex continues.

The post US Court Allows Class Action Against Tether and Bitfinex appeared first on Coinfomania.

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