NY Court Dismisses Half of Class Action Plaintiffs’ “Baseless” Claims Against Tether and Bitfinex

This week, Judge Katherine Polk Failla dismissed half of the class action plaintiffs’ claims that were filed about two years back against the cryptocurrency exchange Bitfinex and the sister company Tether, a stablecoin USDT issuer.

The Judge of the US District Court for the Southern District of New York issued a 127-page opinion regarding the dismissal of the complaint that included RICO claims as well, stated both Bitfenix and Tether on Wednesday.

As for the remaining claims, the court has raised substantial issues, making them “meritless.”

Bitfinex said,

“With half their case now dismissed, their primary expert debunked, and their lead law firm embroiled in its own internecine war – with its partners and former partners trading allegations of fraud and ethics violations – this case is doomed.”

It further said that they would not be settling the remaining of the “baseless” claims either as the litigation exposes the case to be a “clumsy attempt at a money grab, which recklessly harms the whole cryptocurrency ecosystem.”

In other news, on Thursday, the exchange halted trading for over two hours with its status page reading, “investigating issues with the platform.” The incident is now resolved after the company’s intervention.

Handling more than $715 million trading volume in the last 24 hours makes Bitfinex the world’s ninth-largest spot crypto exchange, as per CoinGecko.

The Fee Fiasco

Earlier this week, Bitfinex mistakenly paid $23.7 million in fees for sending $100,000. The transaction was made using a hardware wallet from DeversiFi, a non-custodial exchange that spun out of Bitfinex about two years back.

While, as we reported, the miner has given back $22.1 million, DeversiFi noted in its post mortem that it was due to underlying issues in the EthereumJS library coinciding with gas fee changes associated with the EIP-1559 upgrade in some transactions.

Combined with the fact that Ledger hardware wallet displayed fees in an unreadable manner,

“Only wallets with very large quantity of funds would be impacted, all other users would see a failed transaction.”

DeversiFi offered the miner to keep 50 ETH as a return fee. As for ensuring that it doesn’t happen again, the platform is working with the Ethereum community and Ledger to patch issues that may have contributed to this occurrence.

“On our platform we’ll be implementing stronger defensive measures when interfacing with external libraries, reviewing how we treat failed transactions and also enforcing a ceiling value for any max transaction fees as additional protection.”