Crypto-commodity purchasers allege in a New York federal court that Tether and Bitfinex manipulated crypto markets in 2017–2019 by issuing unbacked USDT to buy Bitcoin. The court certified two purchaser classes in March 2026, and in July 2026 the Second Circuit refused to hear the defendants’ appeal of that order. The case is now moving toward expert discovery and summary judgment.
Latest development Jul 2, 2026
On July 2, 2026, the U.S. Court of Appeals for the Second Circuit denied Tether and Bitfinex leave to appeal the class certification order under Rule 23(f). The ruling leaves Judge Failla’s March 2026 certification in place. The case now moves into its post-certification merits and expert phase.
Why it matters
Class certification exposes the issuer of a widely used stablecoin to aggregate liability for alleged market manipulation. The case will test how courts treat causation and reliance in crypto market-manipulation claims.
Background
In October 2019, crypto traders filed a class action against Tether and Bitfinex in the U.S. District Court for the Southern District of New York. The case was consolidated before Judge Katherine Polk Failla. The plaintiffs allege that Tether and Bitfinex issued hundreds of millions of USDT that was not fully backed one-to-one by U.S. dollars. They claim the defendants used it to buy Bitcoin and other crypto-commodities when prices were falling. The plaintiffs contend that this created an illusion of demand that inflated prices.
The plaintiffs assert market manipulation under the Commodity Exchange Act and monopolization and restraint of trade under the Sherman Act. The defendants deny the allegations and dispute that any unbacked issuance moved prices. After partial dismissals, the plaintiffs filed a narrower consolidated complaint in July 2024 limited to those Commodity Exchange Act and Sherman Act theories.
On March 6, 2026, after six years of pleadings battles, the court certified two classes: U.S. purchasers of crypto-commodities and a subclass of crypto-commodity futures purchasers. The court narrowed both to purchases made with fiat currency or stablecoins. It reserved the contested causation question for summary judgment.
Tether and Bitfinex sought interlocutory review under Rule 23(f). On July 2, 2026, the U.S. Court of Appeals for the Second Circuit denied leave to appeal, leaving certification intact. The case is now moving toward expert discovery, summary judgment, and a possible trial.
Timeline 4 events
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AppealSecond Circuit denies interlocutory appeal of certification
The Second Circuit refused Tether and Bitfinex leave to appeal under Rule 23(f), leaving the certified classes intact.
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OrderJudge Failla certifies two classes (with modifications)
The court certified spot and futures purchaser classes limited to fiat- and stablecoin-funded purchases, reserving causation for summary judgment.
New York Federal Court Certifies Crypto Class Action With Modifications
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OrderPlaintiffs file slimmed-down consolidated complaint
After partial dismissals, plaintiffs narrowed their claims to Commodity Exchange Act manipulation and Sherman Act theories.
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FilingCrypto traders file market-manipulation class action against Tether and Bitfinex
The traders sued in the U.S. District Court for the Southern District of New York, alleging that unbacked USDT issuance manipulated Bitcoin and other crypto-commodity prices.
Experimental AI forecast
How it is madeBy September 30, 2028, will Tether and Bitfinex settle with the certified classes, or will Judge Failla rule on summary judgment?
- Tether settles with purchaser classes38%
- Still pending on September 30, 202832%
- Class claims survive summary judgment18%
- Tether wins summary judgment12%
- Resolves by
- Sep 30, 2028in 23 months
- Record confidence
- Medium
A class settlement is the most likely result by September 30, 2028, at 38%. Certification survived Second Circuit review in July 2026, and that raises the defendants’ aggregate exposure and the cost of fighting on. A summary judgment ruling is possible in this window, but expert discovery must finish first.
How it resolves. Settlement: a class settlement is publicly announced or filed for court approval with the certified classes. Tether and Bitfinex win summary judgment: the court grants summary judgment disposing of all remaining class claims. Claims survive: the court rules on summary judgment and at least one class claim proceeds toward trial. Still pending: none of these occurs by September 30, 2028. If more than one occurs, the first in time controls.
Reasoning
Starting point. Certified U.S. antitrust and commodities class actions after Rule 23(f) review is denied: Roughly 60% to 70% of certified class actions eventually settle, often within two to three years of certification. Relatively few reach a merits verdict.
Most certified class actions settle, and settlement pressure peaks after a Rule 23(f) petition fails, as it did here on July 2, 2026. Tether reportedly has substantial cash, and it has resolved earlier regulatory matters by paying money, so it can fund a deal. Its U.S. regulatory and business ambitions also add reputational reasons to avoid trial. Against that, the court reserved the contested causation question for summary judgment, which gives the defendants a real merits path worth pursuing before they pay. Expert discovery and summary judgment briefing in a complex Southern District of New York case often run 18 months or more, so a ruling by September 2028 is far from assured. That timing risk explains the large still pending share. If the court does rule, some claims surviving is more likely than full dismissal, given the certified classes and the evidence developed through years of litigation.
Second Circuit denied Rule 23(f) review in July 2026 · Causation reserved for summary judgment gives defendants leverage · Tether’s cash and U.S. regulatory interests favor settling · Expert discovery timeline may push rulings past 2028 · Aggregate class exposure alleged in the billions
Generated automatically by Claude Opus 5.5 on Sep 24, 2026 from this case’s record on this site, and published without editorial review. The probabilities are the model’s judgment, not measured frequencies, and they are scored publicly as cases resolve. Not legal or investment advice. How the forecasts are made