On October 10, 2019, a class action lawsuit was filed against iFinex Inc. This is the parent company of Bitfinex and Tether. The class action lawsuit was refiled in New York's Southern District Federal Court on January 8, 2020. The lawsuit is by Young et al. It was followed by another class action lawsuit on January 9 by Bryan Faubus.

In the original lawsuit, the plaintiffs allege that iFinex manipulated the market for cryptocurrencies in 2017. They argue that iFinex did this by issuing Tether that was not backed. They then sold the Tether for Bitcoin in order to increase the price. The plaintiffs claim that the idea that each Tether represented a real dollar. This belief caused traders to be excited about Tether and participate in trading it. The excessive trading lead to a bear market.

Bitfinex reps refused the allegations in an attempt to dismiss the class action lawsuit. The original lawsuit was filed in Washington Western District Federal Court. It was terminated on January 7. Eric Young and Adam Kurtz filed it. The new lawsuit was submitted on January 8 in New York with a new plaintiff, David Crystal, added to the other two names from the original class action lawsuit.

Faubus is a self-identified Bitcoin trader. His lawsuit cites the one filed by Young, Kurtz and Crystal. The filings are nearly identical except for where Faubus refers to Young's lawsuit. It is unknown as of January 11 whether or not the plaintiffs in these cases have any kind of relationship to each other.

It is not clear as of January 11 why the original class action lawsuit was refiled in the state of New York. However, since iFinex is incorporated in New York, the updated filing makes sense. Some other motivations include the New York Southern District Federal Court's indictment of Crypto Capital Corp. This is a former partner of iFinex. Previous news releases have shared that the New York Attorney General is conducting an investigation of iFinex for an alleged mismanagement of funds provided by investors of Tether. More lawsuit information should soon be available.