A U.S. federal court in New York has granted class action status to a lawsuit against cryptocurrency firms Tether and Bitfinex. Thousands of investors can now join the suit rather than filing individual claims. The judge has divided plaintiffs into two groups: those who purchased crypto on the spot market and those who used futures contracts.
The lawsuit alleges that Tether issued significant amounts of USDT tokens between 2017 and 2019 without sufficient backing. Plaintiffs claim these tokens were used to artificially inflate the prices of Bitcoin and Ethereum, leading to billions in damages during the 2017 bull run and subsequent market correction.
Both Tether and Bitfinex have denied the allegations, stating the lawsuit is based on flawed assumptions about USDT issuance and trading. The case will now move to the evidence presentation phase, with both sides required to submit proposals by March 9.