Tether’s CTO Paolo Ardoino Testifying in Lawsuit Alleging Market Manipulation

Paolo Ardoino, who doubles as the chief technical executive at Tether and Bitfinex, is set to appear in court over the class-action lawsuit alleging both firms and associated insiders engaged in manipulative market activity. 

The Tether’s executive will testify following the Monday, September 11 order by the New York judge quashing his counsel’s request for additional preparation time.

Tether’s Counsel Submits Plea to Delay Ardoino’s Deposition

The counsel representing Tether and Bitfinex filed a motion for the court seeking to delay Ardoino’s deposition till early October. 

The court filing submitted by Bitfinex and Tether’s counsel on Friday, September 8, argued that the protracted negotiation regarding the scope captured in Ardoino’s deposition eroded time for the defendants.

The counsel submitted the need to adequately prepare Ardoino by arguing that the clarification of the deposition topics was delayed. The counsel submitted that the clarification was made on September 7, leaving the defense only three days to deliver the out-of-court testimony. 

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Tether and Bitfinex Embroiled in Class-Action Lawsuit

Ardoino’s deposition scheduled for Wednesday marks the latest development in the years-long class action saga. The lawsuit began when LeboBTC chief executive Jason Leibowitz filed the charges on the health of multiple victims in 2019.

The charges filed by the plaintiff accuse Tether and Bitfinex of perpetrating $1.4 trillion in damages to the digital assets market. The submission by the plaintiff’s counsel allege Tether and Bitfinex alongside other firms linked to the executives orchestrated financial misconduct. The charge sheet accuse them of overseeing money laundering and fraud.

Tether, in a published statement, denied the allegations that it orchestrated market manipulation. The post conveyed via the USDT stablecoin issuer’s website challenged the argument in the complaint.

Tether’s Reserves Questioned by Class-Action Lawsuit’s Plaintiffs

The order follows a lengthy disagreement on the coverage during Ardoino’s deposition. The disagreement extended to the purported gaps existing within the trading records furnished by the defendants. A reference to the August semi-redacted filing indicates the two sides differed on the loan-making policies deployed. Also considered was the revelation of wallets holding reserves for the USDT stablecoin. 

The August filing indicated that plaintiffs should assess the accounts disputed by the defendants as holding USDT reserves the right alongside other assets. Also, the plaintiffs submitted an intent to assess whether the Tether’s reserves were sufficient. 

Tether runs USDT stablecoin, which has emerged as the third leading token globally in the digital assets landscape. 

The stablecoin USDT is pegged to the United States dollar and has its total market capitalization at $83 billion per CoinGecko. Tether has in the past indicated that it backs its reserves in cash and treasuries estimated in July to hit $72 billion. 

New York Judge Skeptic of Tether’s Basis for Requesting Delay

Beyond the class-action lawsuit, Tether’s reserves have been subject to regulatory scrutiny. US Regulators led by the New York Attorney General expressed concerns regarding the firm’s reserves. The scrutiny would culminate with the New York regulator barring iFinex – the parent company of Tether and Bitfinex to cease operating in the Empire State.

The Monday ruling by New York’s Southern District Judge Katherine Polk Failla directed Ardoino to testify on the agreed-upon topics identified as undisputed. She dismissed the defense counsel’s request by reiterating concerns about the lawsuit’s pace. 

Judge Failla observed that each party to the lawsuit is responsible for its preparation. She echoed the Friday, September 8 observation that the defendants’ failure to prepare was their own doing.

Judge Failla held that only a single addition was made since August. The addition does not constitute a heavy lift. She expressed skepticism that a single topic could materially increase the defendant’s burden.

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