Bitfinex and Tether’s Chief Technology Officer (CTO), Paolo Ardoino, is set to be deposed this week as part of an ongoing class-action lawsuit against both companies and their associated insiders. The lawsuit, filed in 2019 by Jason Leibowitz, co-founder and CEO of LeboBTC, alleges that Bitfinex and Tether have caused damages amounting to over $1.4 trillion in the crypto market. The suit accuses the defendants of financial misconduct, including bank fraud and money laundering.
Bitfinex and Tether’s legal counsel initially requested a delay in Ardoino’s deposition until early October, citing the need for adequate preparation. However, a New York judge’s order filed on Monday states that the deposition will proceed as scheduled on Wednesday. The defendants claimed that a lengthy negotiation over the topics to be covered in the deposition left them with insufficient time to prepare.
The dispute over the deposition topics revolved around trading records, loan-making policies, and Tether’s reserves held in specific wallets. The plaintiffs argue that they need to determine if the defendants commingled USDT reserves with other assets and assess the sufficiency of Tether’s reserves, which are central to the allegations in the case.
Stablecoins like Tether are digital assets pegged to the value of a sovereign currency, often backed by reserves of cash or liquid assets. Tether, the largest stablecoin in the crypto market with a market capitalization of over $83 billion, claims to have $72 billion in U.S. Treasuries backing its value. However, regulators have raised concerns about Tether’s reserves in the past. In 2021, Tether and Bitfinex’s parent company, iFinex, settled a two-year investigation by the New York State Attorney General, resulting in Tether being prohibited from operating in the state.
The court order by Judge Katherine Polk Failla reaffirmed concerns about the pace of the lawsuit and emphasized that any lack of preparation on the defendants’ part for Ardoino’s testimony is largely their own responsibility. The judge instructed that Ardoino’s deposition cover agreed-upon topics and expressed skepticism that one additional topic added since August would significantly burden the defendants’ preparation.
The deposition of Bitfinex and Tether’s CTO marks a significant development in the long-standing legal saga surrounding both companies. As the class-action lawsuit progresses, the crypto market awaits the outcome as it potentially holds implications for the industry as a whole. Both sides will present their arguments and evidence, shedding light on the allegations of financial misconduct and the alleged damages caused to the crypto market.
