Crypto Scam Relied On 'Shadow Processor', $1.4trn Lawsuit Alleges

An entity marketing itself as a payment processor is at the center of a lawsuit accusing a cryptocurrency exchange and stablecoin issuer of market manipulation, resulting in damages claims of $1.4trn.

Filed Sunday in the U.S. District Court for the Southern District of New York, the suit targets a number of entities connected to Bitfinex, one of the world's largest cryptocurrency exchanges, and Tether, the entity behind the USD-pegged cryptocurrency of the same name.

The lawsuit alleges that the companies worked together to run a “part-fraud, part-pump-and-dump and part-money laundering scheme” to manipulate the cryptocurrency market.

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