‘Mercenary and Baseless’ — Bitfinex Responds to New Lawsuit

Tether-affiliated crypto exchange Bitfinex is battling a new class action complaint, deemed by the firm to be both “mercenary and baseless.”

In an announcement published on Nov. 24, the exchange revealed the lawsuit was filed against both companies in the United States District Court for the Western District of Washington two days prior, on Nov. 22 — allegedly without advance notice. 

Bitfinex: no “nuisance settlements” will be reached

Bitfinex’s post uses sharp language to cast aspersions on the motivation and legitimacy of the fresh legal action. The exchange compares the purportedly “copycat lawsuit” to one filed earlier this fall, at the District Court for the Southern District of New York. 

The new action, Bitfinex claims, “suffers from the same multitude of deficiencies,” makes claims that are  “similarly without merit” and is based on what it considers to be “bogus research.” The language remains steel-tipped, as the announcement continues to state:

“As we predicted last month, mercenary lawyers continue to try to use Bitfinex and Tether to obtain a payday. To be clear, there will be no nuisance settlements or settlements of any kind reached.”

Bitfinex says it will vigorously contest the claims raised by both this and the prior lawsuit, claiming it will succeed to ultimately trounce the allegations in due course.

Should this succeed, Bitfinex and Tether will fully evaluate their legal options against the plaintiffs, the announcement reveals.

The companies characterize the lawsuits as an “attack on the growth, success and innovation of the entire digital token ecosystem,” in which it says it is proud to play a “critical role.” Their fight, they state, “is the community's fight.”

The announcement also redoubles the companies’ denial that Tether tokens or issuance have ever been used to manipulate the cryptocurrency markets. It also refutes the allegations that Tether as well as persistent allegations the token is not backed 1:1 by the U.S. dollar.

The exchange is already fighting its case on crypto Twitter, with Bitfinex CTO Paolo Ardoino saying he “can’t wait to annihilate this one too.”

Mired in legal battles

As reported, Bitfinex, its operator iFinex and stablecoin issuer Tether have been accused by the New York Attorney General’s office to have lost $850 million of the commingled client and corporate funds and to have subsequently engaged in a cover-up to hide the apparent loss.

In October, the U.S. Attorney’s Office for the Southern District of New York indicted the principal of controversial Panama-based shadow payment processor Crypto Capital on three criminal counts. Crypto Capital had, in the exchange’s own words, “processed certain funds for and on behalf of Bitfinex for several years.” Bitfinex has argued it is itself a victim of the fraud.