In a U.S. courthouse for the Southern District of New York, Judge Katherine Failla heard this afternoon from three plaintiff teams suing iFinex et. al. and vying to serve as lead counsel in the emerging class action with potentially tens of thousands of injured members.
Kyle Roche, representing plaintiffs Leibowitz et. al., argued that his firm Roche Cyrulnik Freedman LLP was the first to investigate the alleged market manipulation, the first to file a complaint, and also possessed the top cryptocurrency expertise. “Cryptocurrency is unique,” said Roche, “the law is new, and this case presents difficult definitional issues.”
The case should not be limited to Bitcoin issues alone, he argued; it should include other cryptocurrencies like Ether that may have been harmed by the alleged pump-and-dump scheme.
“Cryptocurrency really works as one market. People who purchase one cryptocurrency often buy many, especially in a bubble” as occurred in the summer of 2017, said Roche. He referenced page 43 of the so-called Griffin paper, introducing it into evidence.
That academic paper, Is Bitcoin Really Un-tethered? by John M. Griffin And Amin Shams, was posted in June 2018 and later updated. It investigated whether Tether inﬂuenced Bitcoin and other cryptocurrency prices during the 2017 boom. The authors found that that purchases with Tether were timed following market downturns and resulted in “sizable increases in Bitcoin prices.” This paper became a foundational piece of research for all four subsequent lawsuits.
Many in the crypto community have long been skeptical that Tether is actually backed by the U.S. dollar at a one-to one ratio as claimed. The Griffin paper also found “insufﬁcient Tether reserves before month-ends.”
The Griffin paper showed, said Roche, that the price of Bitcoin…