Roche Freedman Defends Bitfinex, Tether Market Manipulation Suit

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  • Roche Freed­man found­ing part­ner Kyle Roche is embroiled in an alleged pay-for-play scan­dal tar­get­ing Ava Labs competitors
  • The law firm has argued Roche’s com­ments shouldn’t dis­qual­i­fy it from lit­i­gat­ing cryp­to companies

Roche Freed­man, the law firm behind mul­ti­ple legal actions against cryp­to com­pa­nies, is in dam­age con­trol mode after found­ing part­ner Kyle Roche was accused of tak­ing pay­offs to harm indus­try players.

The firm on Fri­day urged a New York fed­er­al court judge to deny Teth­er and Bitfinex’s requests to dis­qual­i­fy it as co-lead coun­sel on its ongo­ing class action, say­ing one attorney’s actions shouldn’t hold con­se­quences for the entire practice.

Roche alleged­ly struck a secret pact with Avalanche devel­op­er Ava Labs to use lit­i­ga­tion as a weapon against its com­peti­tors. In secret­ly-record­ed videos pub­lished by Cryp­toLeaks, he admit­ted to being Ava Labs’ in-house cryp­to expert and that he was respon­si­ble for ensur­ing the US Secu­ri­ties and Exchange Com­mis­sion stays dis­tract­ed with oth­er targets.

Roche claims infor­ma­tion in the Cryp­toLeaks report is false and con­tains high­ly-edit­ed footage. His law firm, how­ev­er, told the court that the attor­ney “unfor­tu­nate­ly” made untrue state­ments to impress the meet­ing attendants.

“He also made inap­pro­pri­ate remarks dis­parag­ing jurors and class mem­bers,” Roche Freed­man said.

Short­ly after the exposé, and despite deny­ing the accu­ra­cy of the alleged con­spir­a­cy, Roche filed to with­draw as an attor­ney for mul­ti­ple class action law­suits he ini­ti­at­ed against com­pa­nies includ­ing Teth­er, Bitfinex, Binance.US, Solana Labs and Dfin­i­ty — the lat­ter two being direct Ava Labs competitors. 

Roche Freedman’s law­suits claim Solana Labs and Dfinity’s respec­tive tokens, solana and inter­net com­put­er, are unreg­is­tered secu­ri­ties. The firm’s Dfin­i­ty suit also alleges instances of insid­er trading.

Roche Freedman says Tether, Bitfinex case wasn’t filed for Ava Labs

Some sued par­ties don’t con­sid­er Roche with­draw­ing from the case as sat­is­fac­to­ry. Teth­er and Bitfinex have demand­ed the entire firm be removed from their case, stat­ing oth­er Roche Freed­man lawyers are known to hold sub­stan­tial amounts of AVAX tokens. 

In response, Roche Freed­man said Roche is no longer part of the firm’s class action prac­tice and has renounced his finan­cial inter­est in the lit­i­ga­tion against Teth­er and Bitfinex, which alleges the firms engaged in mar­ket manip­u­la­tion to inflate token prices.

The firm also claimed that the Tether/Bitfinex case wasn’t filed at Ava Labs’ request, and that part­ner inter­est in Ava Labs or AVAX tokens doesn’t present a con­flict of inter­est. It said the case was filed before Ava Labs’ rela­tion­ship with the firm began. 

How­ev­er, a mem­o­ran­dum of under­stand­ing shows a finan­cial agree­ment between both par­ties com­menced on Sep­tem­ber 30, 2019 — about a week before the case in ques­tion was filed on Octo­ber 6, 2019 by Kyle Roche and Velv­el Freedman.

Teth­er and Bitfinex’s lawyer Elliott Green­field didn’t return Block­works’ request for comment.

Roche Freed­man fur­ther argued Ava Labs isn’t a com­peti­tor to the par­ties sued — and that even if it were, there would be no dis­qual­i­fy­ing conflict. 

“The idea, there­fore, that the firm filed this case for Ava Labs, is both impos­si­ble, non­sen­si­cal, and untrue,” Roche Freed­man said.


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  • Shali­ni Nagarajan

    Block­works

    Reporter

    Shali­ni is a cryp­to reporter from Ban­ga­lore, India who cov­ers devel­op­ments in the mar­ket, reg­u­la­tion, mar­ket struc­ture, and advice from insti­tu­tion­al experts. Pri­or to Block­works, she worked as a mar­kets reporter at Insid­er and a cor­re­spon­dent at Reuters News. She holds some bit­coin and ether. Reach her at [email pro­tect­ed]

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