Crypto Market Unimpressed by Tether Lawsuit
The crypto market once again showed that it can ignore negative news about Tether (USDT), the most popular stablecoin, and that it seemingly agrees this coin is still worth one U.S. dollar.
While the recent lawsuit against Bitfinex and Tether was expected by the two companies, the market seems completely oblivious to it altogether, as USDT still trades over one U.S. dollar.
As reported, a major class-action lawsuit has been filed on October 6th against cryptocurrency exchange Bitfinex and its sister company, stablecoin issuer Tether, claiming that the two companies used USDT to manipulate the crypto market during 2017-2018 bull market and they caused "the biggest financial bubble in human history."
Since the news broke yesterday, the most popular stablecoin in the world and the 5th coin by total market capitalization has been trading above 1 USD.
And just because the market didn’t notice or doesn’t care for the news, doesn’t mean that various commentators follow suit. On the contrary – they has delivered various comments on the lawsuit, showing the difference of opinions and general divisiveness on this issue.
One of the people to notice this is Emin Gün Sirer, CEO of Ava Labs, which created the decentralized services platform Ava, who said that the “Cryptotwitter is fiercely divided on Tether,” with some believing USDT is “the key ingredient of repeated pump-and-dumps,” and others that it’s “an accurate and semi-transparent reflection of natural market forces.” In the same Twitter thread, he said that this is “a monumental lawsuit against Tether-based manipulation of cryptocurrency prices,” led by an “absolutely top notch” law firm. As a reminder, the five plaintiffs are represented by law firm Roche Freedman, which worked on the (in)famous Craig Wright case.
On the other hand, Gabor Gurbacs, Director of Digital Asset Strategy at an investment management firm VanEck, tweeted that he’s “tired of hoodwink academics, hype-media and uninformed lawyers discrediting the hard work & structural innovation that Tether and Bitfinex built,” adding that the two built services for bitcoin and crypto companies not provided by others. “Stop the witch-hunt; protect innovation,” he said.
Meanwhile, in his daily commentary, Mati Greenspan, Senior Market Analyst at eToro, stressed that in major financial institutions across the globe, the process of creating unbacked currency for the purpose of purchasing financial assets and propping-up market prices is simply known as common practice.
"So if anyone is worried that the price of bitcoin has been 'pumped' please take a moment to think about the effects of a full decade of ample quantitative easing and other liquidity injections multiplied by the fractional reserve system and how this might've affected the value of stocks and bonds," the analyst said.
Others believe that the suit should be dismissed altogether.
And then there are those who don’t necessarily believe in absolutes, and that if the one side is right, doesn’t mean the other was wrong.
All that said, the crypto market seems not to have paid any particular attention the lawsuit, and we are yet to see how, if at all, it will affect both the USDT, and the two companies themselves. But this is not the first time that crypto market ignored somewhat negative news concerning Tether. Just this May, we reported that the lawyers have confirmed the token is not backed 100% by cash reserves, arguing that it’s not obliged to back its token 1:1 with fiat. What did the market thought of that? USDT went on trading above USD.