Bitfinex and Tether CTO Paolo Ardoino to Testify in Market Manipulation Lawsuit

By Decrypt September 12, 2023 In Bitfinex, Tether, Topics

Bitfinex and Tether’s CTO Paolo Ardoino will be deposed this week as part of a years-long class-action lawsuit against both firms and their associated insiders, according to a New York judge’s order filed on Monday.

Tether and Bitfinex’s counsel had asked for Ardoino’s deposition to be delayed to early October. In a court filing on Friday, the firms’ counsel said a protracted negotiation over the scope of topics in Ardoino’s deposition left the defendants with too little time.

“Defendants simply want to ensure that Mr. Ardoino is adequately prepared,” they said, adding that “the deposition topics were not clarified until September 7–only three business days before” his out-of-court testimony was set to be delivered.

Ardoino’s deposition, slated to take place on Wednesday, is the latest in a years-long courtroom saga. The lawsuit was originally filed by LeboBTC co-founder and CEO Jason Leibowitz on behalf of the plaintiff class in 2019.


The lawsuit claims Bitfinex and Tether have caused over $1.4 trillion in damages to the crypto market. It accused Tether, Bitfinex, Crypto Capital, and the firms’ associated executives of financial misconduct, including bank fraud and money laundering.

Tether has denied allegations of misconduct, which include market manipulation, in a written statement, which was posted to the stablecoin issuer’s website a day before the lawsuit was filed in 2019. The statement was referenced in the lawsuit’s complaint.

Both sides had disagreed on what topics could be covered in Ardoino’s deposition. That included purported gaps in trading records produced by defendants, their loan-making policies, and certain wallets that held reserves for Tether, the crypto market’s leading stablecoin, according to a semi-redacted court filing from late August.

“Plaintiffs need to determine if accounts that [the defendants] contend held USDT reserves were commingled with other assets, and to assess the sufficiency of Tether’s reserves—issues at the heart of the allegations in this case,” the filing said.

Stablecoins are digital assets pegged to the price of a sovereign currency, such as the U.S. dollar, and often backed by reserves of cash or assets just as liquid. In late July, Tether said $72 billion in U.S. Treasuries backed crypto’s largest stablecoin, which currently has a market capitalization of over $83 billion.

Regulators in the U.S. have taken issue with Tether’s reserves in the past. In 2021, Tether and Bitfinex’s parent company, iFinex, settled a two-year-old investigation brought by the New York State Attorney General over Tether’s reserves that ultimately barred it from doing business in the Empire State.

Southern District of New York Judge Katherine Polk Failla ordered on Monday that Ardoino’s testimony cover agreed-upon topics that are described as undisputed. She also reiterated “concerns” the court has regarding the lawsuit’s pace.

Additionally, Judge Failla said any lack of preparation on the part of the defendants for Ardoino’s testimony is “largely of their own doing,” explaining a previous order on Friday urged both sides to be prepared.

In terms of previously disputed topics, Judge Failla said that one topic added since August shouldn’t be a heavy lift. “The court is skeptical that preparation for this one additional topic materially increases the burden,” she said.

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