Combination of 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.”

A major hurdle

Is there price dominance?

“Price manipulation requires proof of the ability to create/cause artificial prices and proof that the defendants, in fact, caused the price of the futures contract — the Bitcoin futures contract, in this case — to be artificial. While facts can be used to establish the requisite specific intent and the ability to cause artificial prices, proving an artificial price did, in fact, occur can often be a difficult and technical but-for analysis.”

“Tether and its affiliates have never used Tether tokens or issuances to manipulate the cryptocurrency market or token pricing. All Tether tokens are fully backed by reserves and are issued pursuant to market demand and not for the purpose of controlling the pricing of crypto assets.”

Problems with stablecoins in general 

“There are more chances of frauds, MLMs [multi-level marketing schemes] and scams arising out of these countries due to the lack of regulations for digital assets.”

Investigation by New York’s Attorney General

Why the Roche group?

“Roche defined it as anyone who owned crypto over the last six years. That’s overwrought — much too broad. Bitcoin and Bitcoin futures are closer to my definition of the class. Not all cryptos should be included. That would simply be taking money from real victims and giving it to others.”

A significant case?

“There are some courts that have found that Bitcoin is a commodity in interstate commerce, but it is by no means a settled issue. It does help that the agency responsible for enforcing the CEA, the CFTC, has publicly taken the position that Bitcoin is a commodity. How a jury will see the issue is not a certainty. As such, any decision by the court on each of these issues will be closely watched by the industry.”

Next steps

“We have no further comment at this time beyond our most recent statement and look forward to putting the facts before the court, and addressing the baseless allegations in the judicial forum.” 

Bringing a pickaxe to a gunfight