A New York district court has scrapped the appeal of Bitfinex and Tether against the consolidated class-action lawsuit against them, calling the arguments “meritless.”
The arguments were made in the court by the legal representatives of Phillip G. Potter, the former chief strategy officer of Bitfinex and Tether.
In a court order reviewed by Finance Magnates, the judge stated that “Potter’s argument in support of his proposed motion are meritless. His legal arguments against Plaintiffs’ claims are based on inappropriate or inapplicable legal standards.”
The wrongdoings of two major crypto companies?
In multiple class-action action lawsuits against the two sister companies, the plaintiffs alleged that Potter was involved in “extensive fraudulent and unlawful conduct.”
According to the lawsuit, Potter, along with business partner and another defendant in the case Giancarlo Devasini, formed Tether in 2014 after rebranding another stablecoin issuer Realcoin. The plaintiffs alleged that Potter concealed his controlling role in both Bitfinex and Tether, two major firms in the cryptocurrency industry.
The class-action lawsuits also blamed the two companies for manipulating Bitcoin prices during the 2017 bull run.
The allegations were largely based on the revelations made by the Paradise Papers in 2017, and a research report by two American academics – John Griffin, a professor at the University of Texas, and Amin Shams, an assistant professor at the Ohio State University.
The plaintiffs also alleged that Potter made repeated public statements specifying the company’s intent to evade banking laws and anti-money laundering regulations.
“This is more than sufficient to state fraud claims against Potter,” the legal complaint added.
“…his arguments that Plaintiffs do not sufficiently allege his role in Defendants’ manipulative scheme are contradicted by allegations that show he was a key member of that scheme, as Chief Strategy Officer for Bitfinex and Tether,” the judge noted.
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