Two Crypto Exchanges Allegedly Caused USDT Market Manipulation

Crypto exchanges Bittrex and Poloniex received yet another lawsuit, this time in regards to market manipulations and flooding the stablecoin market with Tether (USDT) tokens, created out of thin air.

The plaintiffs, most of whom are investors that purchased cryptocurrencies during the 2017 crypto market all-time high, accuse Bittrex and Poloniex in manipulating the total amount of USDT in circulation. The accusations drove crypto asset prices up, skyrocketting to an all-time high. The investors claim that Bittrex’s daughter company, Tether, “issued billions of USDT without proper backing with U.S. dollars.

According to the class-action documentation, the USDT tokens were used “to purchase cryptocurrencies, which drove the largest bubble in history.” The plaintiffs also noted that such actions resulted in multi-billion damage to the crypto industry.

The plaintiffs also stated that the altcoin-oriented crypto exchanges Poloniex and Bittrex were also part of the crypto manipulation scheme, facilitating enormous buy orders to simulate fresh liquidity in the crypto market.

“With the assistance of Poloniex and Bittrex, Tether and Bitfinex manipulated the crypto market with fraudulently-issued Tether tokens to conclude well-timed purchases of cryptocurrencies, when their prices tumbled down.” the documentation papers read.

Further into the allegation papers, the plaintiffs stated that “the exchanges collaborated with Tether and used its false guarantee that each USDT token is fully backed by U.S. dollar and Tether listings allowed exchanges to rapidly accumulate the much-needed rank in the field of the largest exchanges in the world.”

However, despite the ongoing lawsuit, which was filed back in October 2019, some of the investors continue their trading routine. Pinchas Goldstein, who suffered from losses due to economic losses in 629 Bitcoin futures contracts, appears to be trading on the same day as the original date of the class-action filing. Goldman reportedly made his futures contracts between January 16, 2018, and June 3, 2020.