Plaintiffs in a years-long class-action lawsuit against Tether and Bitfinix filed an amended complaint accusing the companies of manipulating crypto prices through a deceptive scheme involving USDT , Tether’s dollar-backed stablecoin, according to court documents filed in the Southern District of New York. 

The complaint alleges Tether and Bitfinix “executed a sophisticated scheme to fraudulently inflate the price” of cryptocurrencies, including Bitcoin ( BTC ), through “massive, carefully timed purchases […] to signal to the market that there was enormous demand and thus cause the price of those commodities to spike.”

The companies purportedly financed these purchases with billions of dollars in USDT, which — in contradiction to repeated assurances by Tether — was not, in fact, backed one-to-one by United States dollars. In doing so, the Plaintiffs claim that Tether and Bitfinix violated both the Commodities Exchange Act (CEA) and the Sherman Antitrust Act.

Related: SEC vs. Ripple: One year on since landmark ruling

“In reality, Tether issued billions of USDT to itself with no US dollar backing — simply creating the USDT out of thin air,” according to the complaint, which goes on to allege that the deception “ultimately result[ed] in billions of dollars of damage to innocent crypto commodity purchasers.”

Plaintiffs amend complaint in Tether lawsuit for alleged USDT scheme image 0 An exhibit from the amended filing highlighting alleged suspicious trading activity on the Bitstamp exchange. Source: CourtListener.com

This is the third complaint to be filed in this case, which was opened in 2019 and has since faced repeated delays, including the removal of the Plaintiffs’ original legal counsel in 2022. Tether and Bitfinex challenged the Plaintiff’s request to amend the complaint in 2023, calling it a last ditch effort to revive a failing case.

“The reason for this dramatic change of course is clear: two years of fact discovery — including more than a million pages of document discovery and numerous [...] depositions — have not revealed a single shred of evidence supporting the market manipulation scheme alleged in the [Complaint],” the Defendants argued.

Plaintiffs assert that “[e]xpert analysis shows that Bitfinex and Tether issued unbacked USDT and used that debased USDT to buy large amounts of crypto commodities” in the filing.

Magazine: Decade after Ethereum ICO: Blockchain forensics end double-spending debate