Bitfinex and Tether have denied all allegations featured in an amended class action lawsuit filed against their parent company, iFinex Inc, according to a blog post published today by Bitfinex.

The updated lawsuit, filed on June 3 in the Southern District of New York, accuses Bitfinex, Tether, Poloniex and affiliated firms of allegedly manipulating the crypto market. The initial lawsuit was filed in October 2019. 

The 156-page claim mentions Matthew Script, Benjamin Leibowitz, Jason Leibowitz, Aaron Leibowitz, and Pinchas Goldshtein as plaintiffs. They are represented by Selendy & Gay PLLC, Roche Cyrulink Freedman LLP and Schneider Wallace Cottrell Konecky LLP. 

Specifically, the lawsuit alleges that iFinex subsidiaries “made massive, carefully timed purchases of cryptocommodities to signal to the market that there was enormous demand and thus cause the price of those commodities to spike.” 

To run this supposed scheme, the defendants allegedly used Tether (USDT), which is referred to as a “fraudulently issued crypto-asset”. The plaintiffs argue that the stablecoin was eventually untethered because there were not enough U.S. dollars in reserve to back every USDT.

While the initial lawsuit estimated the total damages at $1.4 trillion, this amount is absent in the updated version. Instead, the plaintiffs are now requesting “reasonable costs of suit, pre- and post-judgment interest, and reasonable attorneys’ fees”. 

The updated claim is considerably longer than the 96-page original lawsuit, and it seems like most of the added material attempts to debunk iFinex’s alleged scheme in more detail.

Bitfinex says the allegations are “blatantly false”

Bitfinex and Tether have now rejected all charges, arguing that the lawsuit has been “designed to undermine the cryptocurrency community”. The companies will “vigorously defend themselves, their customers, their stakeholders, and the crypto community,” Bitfinex General Counsel Stuart Hoegner stressed in the blog post. 

Addressing the “baseless” lawsuit, Hoegner said:

"Even after taking three full months to amend their complaint, the plaintiffs' allegations remain untethered to either the facts or the law. They conflate perceived correlation with causation in an effort to prop up theories that are untrue and unsupportable."

Biftinex official has also focused on Tether-related allegations, arguing:

"Tether is proud to play a critical role in the digital token ecosystem. 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”.

Cointelegraph reached out to Bitfinex for an additional comment, and was told that the company will “stand on the quotations” from its public statement. 

iFinex’s legal battle with the U.S. Attorney General in New York

In 2019, iFinex found itself in hot water after the United States Attorney General in New York (NYAG) accused Bitfinex of using Tether’s cash reserves to cover a rumored $850 million funding gap with reserves meant for backing the stablecoin.

The latest update from this case was aired in December 2019, when NYAG Letitia James heavily criticized the efforts of Bitfinex and Tether to halt her office’s investigation into the companies in a filing with the New York State Supreme Court’s Appellate Division. Lawyers for Bitfinex and Tether subsequently responded saying that the office does not have authority to investigate the companies because “tethers are not securities or commodities.”