Tether and Bitfinex are so closely tied that they nearly plagiarized each other's press releases about expected upcoming lawsuits. Both iFinex companies used combative language, calling their accusers meritless and claiming new allegations were based on a bogus study. They described being targeted by "mercenary" lawyers, who, by their framing, are interested in making money and ignoring ethics.
It is irresponsible to suggest that Tether enables illicit activity due to its efficiency, liquidity and wide-scale applicability within the cryptocurrency ecosystem.
The Tether and Bitfinex controversy
News of additional lawsuits came shortly after Bitfinex and Tether won a motion to halt turning over documents in the New York Supreme Court. Bitfinex had been accused of creating Tether out of nothing in April 2019 and was sued by New York Attorney General Letitia James.
The story goes that Bitfinex was processing transactions through Crypto Capital, whose funds were seized by various governments. Since Bitfinex could not get their money back, they reportedly took an approximately $625 million loan from Tether. Tether continued to print its currency even while carrying that large deficit.
James' office was not happy about iFinex avoiding the document handover, and believed the companies had been stalling the entire time.
Respondents have been crystal clear that their litigation strategy is to delay this process as long as they can, by procedural maneuvers and duplicative motion practice.
Reactions from the community
Sam Bankman-Fried, then CEO of Alameda, seemed to identify with iFinex's defense against the allegations.
The TL;DR: USDT issuances sometimes come with BTC price increases because people create USDT to buy BTC. Nothing shady required to explain that.
Others were not buying the plea of innocence, with one observer summarizing the strategy as an attempt to preemptively discredit anyone who might ever sue the company.
LEO, Bitfinex's proprietary coin, felt the pain of the lawsuit news, with its price dropping around 5% soon after the announcement.