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Duane Morris Takeaways: On March 6, 2025, Judge Katherine Polk Failla of the U.S. District Court for the Southern District of New York granted class certification with modifications in a case involving a stablecoin issuer's alleged issuance of unbacked or debased stablecoins in furtherance of an alleged scheme to manipulate the market prices for crypto commodities and futures in the litigation captioned In Re Tether & Bitfinex Crypto Asset Litigation, No. 19 Civ. 9236, 2026 WL 629826 (S.D.N.Y. Mar. 6, 2026). The ruling is significant as it shows that while crypto purchasers who file class action complaints alleging violations of the Sherman Act and Commodities Exchange Act may be able to satisfy Rule 23 so long as they offer reliable expert models on class-wide causation and damages and limit their proposed classes to purchasers who used fiat currency or stablecoins to make their purchases on domestic or stateless exchanges, such class actions may also be subject to dismissal based on summary judgment on the question of whether the defendants' alleged provision of unbacked or debased stablecoins caused an increase in price of crypto commodities and futures.
Background
In the litigation captioned In Re Tether & Bitfinex Cryto Asset Litigation, the plaintiffs, four purchasers of Bitcoin, Bitcoin futures, and other crypto assets, brought a class action against various entities and individuals associated with the issuer of a stablecoin and the stablecoin issuer's sister company, a crypto asset exchange, alleging that the defendants artificially inflated the prices of the plaintiffs' crypto asset purchases by engaging in market manipulation under the Commodities Exchange Act and monopolization and restraint of trade under the Sherman Act. Id. at *2, 26.
According to the plaintiffs, the stablecoin issuer issued hundreds of millions of unbacked or debased stablecoins while telling the market that these stablecoins were fully backed by U.S. dollars whereas actually they were backed only by the sister crypto exchange's accounts receivables and inaccessible funds. Id. at *2-3. Further according to plaintiffs, the defendants used an anonymous trader to engage in cross-exchange arbitrage by purchasing "massive" amounts of crypto commodities on other exchanges with the debased stablecoin, selling them on the defendant exchange for U.S. dollars, and withdrawing those funds as the stablecoin. Id. at *4. All these activities were allegedly performed by the defendants with knowledge and intent to inflate crypto commodity and futures prices and allegedly resulted in artificially inflated prices of crypto assets purchased by the plaintiffs. Id.
The plaintiffs moved for class certification under Rule 23, seeking to certify classes of acquirers in the United States during the class period of crypto commodities and futures, respectively. Id. at *5. In support, the plaintiffs submitted a report from an antitrust and economics expert that included an event study purporting to show that the issuance of the unbacked or debased stablecoin caused the price of Bitcoin to increase, a regression analysis that purported to model how a change in the outstanding volume of the stablecoin affects Bitcoin prices, and an overcharge model that purported to quantify the artificial inflation of Bitcoin based on the extent to which the stablecoin was debased or unbacked. Id. at *6.
The defendants moved to exclude the plaintiff's expert and opposed class certification by challenging only adequacy and predominance (not any of the other Rule 23 requirements). On adequacy, the defendants argued that adequacy was not satisfied due to two sources of potential intraclass conflict – intraclass trading and plaintiffs' alternative models for showing debasement and inflation. On predominance, the defendants argued that individual questions would predominate when resolving questions of class-wide impact, injury, and extraterritoriality.
The Court's Decision
The Court began its analysis by excluding the plaintiffs' expert's event study purporting to show that the issuance of the unbacked or debased stablecoin caused the price of Bitcoin to increase. As the Court explained, the event study was unreliable because the "t-test" model it employed violated the key assumption of the model "that the values within in each tested group are independent, meaning that they are not correlated with each other.. Id. at *6 n.5, 12-13. However, the court denied exclusion of the expert's regression model, overcharge model, and other opinions. Id. at *14-19.
Turning next to the defendants' two adequacy challenges, the Court rejected both. First, the Court found that intraclass trading did not create any conflicts because the alleged classes included only buyers alleging only price inflation. Id. at *23-24. Second, the Court found that there were also no intraclass conflicts based on plaintiffs' alternative methods for showing stablecoin debasement because the methods differed only "in the extent of the debasement they show on certain days, but they are not diametrically opposed. In fact, the debasement is, by default, one-directional." Id. at *25.
Turning to defendants' challenges to predominance, the court found that common evidence would be used "to establish that Defendants engaged in certain conduct, such as issuing debased or unbacked [stablecoins], misrepresenting that [the stablecoins were] always backed one-to-one by USD held in reserve by [the defendant crypto exchange], disseminating debased [stablecoins] through the Anonymous Trader, and conspiring with the Anonymous Trader to increase cryptocommodity prices." Id. at *27. The court also found that common evidence would be used for the elements relating to the defendants' scienter or intent. Id. at *27. In sum, the Court found that common questions predominated as to "issues related to defendants' anticompetitive conduct." Id. However, as the Court explained, "the elements of antitrust and CEA cases that pertain to Defendants' conduct almost always present a common question that predominates ... Because of this, class certification in CEA and antitrust cases often turns on whether common issues predominate in establishing injury, causation, or damages." Id. at *26-27 (emphasis added).
Next the Court found that the plaintiffs could demonstrate class-wide impact or causation through plaintiffs' expert's regression analysis, although the Court found this to be a "closer question." Id. at *28. Although the defendants did not provide a sufficient reason to exclude the regression analysis such as the expert's failure to account for a key variable, the Court found nevertheless that the defendants called into question the plaintiffs' ability with its regression model to establish "the fact of causation." Id. at *28-30. However, as the Court explained, "That type of challenge sounds more in summary judgment than in Rule 23(b)(3). Indeed, the Supreme Court has warned that when 'the concern about the proposed class is not that it exhibits some fatal dissimilarity but, rather, a fatal similarity — [an alleged] failure of proof as to an element of the plaintiffs' cause of action — courts should engage that question as a matter of summary judgment, not class certification.'" Id. (quoting Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442, 457 (2016)).
Further, the Court found that the plaintiffs could measure damages on a class-wide basis using Plaintiffs' overcharge model. Id. at *31.
Finally, as to the defendants' remaining challenges to predominance, the Court rejected them as to the predominance finding but embraced them for purposes of narrowing the Plaintiffs' proposed class definitions in two ways.
First, on the question of injury, the Court found that whether common issues predominate turns on whether injury occurs "(i) when a Class Member purchases an artificially inflated cryptocommodity, or (ii) when that Class Member experiences economic loss flowing from their purchase of that cryptocommodity." Id. at *31. As the Court explained, whereas the defendants argued "that economic loss is required for Class Members to establish injury — like in the securities context," Plaintiffs argued "that the magnitude of loss only matters for the calculation of damages — like in the antitrust context." Finding this issue "close," the Court ruled for the plaintiffs, reasoning as follows: "The [d]efendants are correct that the Class Assets share more in common with securities than commodities such as olive oil, especially given that purchasers of cryptocommodities often sell them later, either at a loss or gain ... But the Court ultimately sides with Plaintiffs because, at its core, this is an antitrust case, not a securities action. And unlike in securities cases, antitrust injury flows from the overcharge itself." Id. at *32. The Court "remain[ed] concerned, however, that the initial harm that is required to establish an antitrust injury is not as clearcut for Class Members who purchased cryptocommodities with other cryptocommodities" because "whether that purchaser has incurred the required initial overcharge would depend on whether the purchasing cryptocommodity was more or less inflated than the purchased cryptocommodity." Id. at *33. In addition, the court found no injury for any alleged class members who acquired class assets only by engaging in mining, using a crypto fork, or receiving them as gifts. Id. at *33. Thus, the Court limited the proposed classes of crypto commodity and futures acquirers to purchasers who used fiat currency or stablecoins. Id.
Second, on the question of extraterritoriality, the Court found that "[o]n Plaintiffs' CEA [Commodities Exchange Act] cause of action, individual questions predominate regarding futures trades on foreign exchanges" because "the domesticity of transactions on foreign exchanges is too fact-specific for class certification," including "facts concerning the formation of the contracts, the placement of purchase orders, the passing of title, or the exchange of money." Id. at *34-36. Foreign exchanges aside, the Court found that there are no individualized questions as to domesticity for futures transactions executed on domestic exchanges." Id. Lastly, on the remaining question of whether stateless exchanges "are governed by the domestic exchange rule or foreign exchange rule," which question the Court found "especially important in the context of the crypto-economy," the Court held that this inquiry satisfied predominance because it "can be determined on an exchange-by-exchange, rather than person-to-person, basis." Id. at *35. Accordingly, the Court limited the futures subclass to all purchasers of crypto commodity futures with fiat currency or stablecoins in the United states during the class period so long as they purchased futures on either U.S.-based exchanges or stateless exchanges "that either (a) matched trades on servers in the United States or (b) prohibited buyers from revoking their orders once placed." Id. at *38.
For these reasons, the Court granted the plaintiffs' motion for class certification and narrowed the plaintiffs' proposed class definitions.
Implications For Companies
The In Re Bitfinex class certification ruling is an instructive one for litigants on either side of crypto class actions alleging antitrust and commodities violations. For plaintiffs, it shows that table stakes for achieving class certification of such claims include (a) proffering reliable models regarding class-wide causation and damages and (b) limiting class definitions to transactions that can use common evidence to satisfy the injury element and escape the extraterritoriality defense. For defendants, it shows that if their challenges to plaintiffs' causation and damages models are ineffective, then summary judgment remains as a vehicle to show the absence of sufficient evidence for the plaintiff to demonstrate causation of any purported antitrust or commodities injury due to defendants' alleged conduct.
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