The iFinex–Tether market manipulation lawsuit continues. Last week, Judge Katherine Failla of the Southern District of New York selected Roche Cyrulnik Freedman as interim lead plaintiff counsel, and four civil actions were consolidated into a single class action: Leibowitz v. iFinex Inc.
Combination of old and new
This isn’t shaping up as an ordinary civil action. As Failla observed in announcing her lead counsel decision on Feb. 27 via a telephone conference call, she claimed that the case combines old and new:
“The cryptocurrency law is quite novel [with] lots of issues and not a lot of resolution, but there is a lot of established law out there as well with respect to pleading requirements, with respect to traditional antitrust issues and RICO and the Commodities Exchange Act.”
The case has reached an inflection point where the plaintiff groups that had been competing among themselves for primacy must now coalesce and confront iFinex Inc. directly. It’s a good time to ask: What sort of challenges await the litigants?
A major hurdle
Felix Shipkevich, an attorney specializing in cryptocurrency-related legal and regulatory matters at Shipkevich PLLC, told Cointelegraph: “I am pessimistic that they [i.e., plaintiffs] will be able to overcome the hurdle of proving market manipulation of a decentralized currency like Bitcoin.”
The scope of market manipulation can differ from industry to industry, said Shipkevich. It’s one thing to prove market manipulation with commodities futures but another to prove it with equity securities. Cryptocurrencies are still so new that it isn’t clear which way the courts will lean with regard to market manipulation.
“Price manipulation claims under the Commodity Exchange Act (CEA) are difficult to prove,” according to a…