The Stablecoin on Trial: Certification, Causation and the Borders a Crypto Market Ignores

Code on Trial | 30 July 2026

A federal court in Manhattan has certified a class of Bitcoin and other cryptocommodity buyers to pursue market manipulation and antitrust claims against the entities behind the world’s largest stablecoin. The certification order in In re Tether and Bitfinex Crypto Asset Litigation, No. 19 Civ. 9236 (S.D.N.Y.), signed on 23 February 2026 and issued in redacted form in March, survived its first appellate test on 2 July 2026, when the Second Circuit declined the defendants’ Rule 23(f) petition for interlocutory review.¹ The order rewards closer reading, both for what it decides and for what it leaves for another day.

A procedural win with a reserved question

The plaintiffs allege that Tether issued hundreds of millions of USDT that were not backed one to one by US dollars, then used the tokens to buy Bitcoin as prices fell, manufacturing demand and inflating the market. They sue under the Sherman Act on the cryptocommodity purchases and under the Commodity Exchange Act on the futures. Judge Katherine Polk Failla held that common questions of conduct and intent predominated under Rule 23(b)(3), excluded the plaintiffs’ event study because its statistical test violated its own independence assumption and admitted the regression and overcharge models. She then reserved the decisive question, whether unbacked issuance actually caused the alleged inflation, for summary judgment, citing Tyson Foods v Bouaphakeo, 577 U.S. 442 (2016).² Certification here is a finding that the claims can be tried together, not that they will succeed.

One point of doctrine did the heavy lifting. The court reasoned that this is at its core an antitrust case, where injury flows from the overcharge itself, rather than a securities case, where a plaintiff must show realised economic loss. On that footing the class cleared predominance. The court still narrowed it, confining the classes to buyers who paid in fiat or stablecoins and excluding anyone who acquired assets only by mining, forks or gifts.

The precedent chain the court had to climb

The harder obstacle was territorial. The Commodity Exchange Act does not apply extraterritorially. The Second Circuit imports only the transaction-based prong of Morrison v National Australia Bank, 561 U.S. 247 (2010), through Absolute Activist Value Master Fund v Ficeto (2d Cir 2012), Choi v Tower Research Capital (2d Cir 2018) and In re Platinum and Palladium Antitrust Litigation (2d Cir 2023). Domesticity turns on where irrevocable liability is incurred or title passes. Judge Failla split the putative class into purchasers on domestic exchanges, on foreign exchanges and on stateless exchanges, held that foreign-exchange futures required individualised proof and fell away, then assessed stateless venues exchange by exchange rather than trader by trader.³

The timeline frames the exposure. In 2021 the CFTC penalised Tether US$41 million and the New York Attorney General settled for US$18.5 million, both over misstatements about the reserves said to back USDT.⁴ The certified class period runs from March 2017 to February 2019. Judge Failla signed the certification order in February 2026 and the Second Circuit refused interlocutory review in July 2026. Nine years after the conduct, the merits question of causation is only now approaching trial.

England, collective redress and the road ahead

England has no general opt-out damages class action. The nearest analogue is the collective proceedings regime before the Competition Appeal Tribunal under section 47B of the Competition Act 1998, opened up by Merricks v Mastercard [2020] UKSC 51.⁵ A stablecoin manipulation claim pleaded as an abuse of dominance or a cartel could in principle be certified there. A freestanding market-manipulation class of the Tether kind, resting on commodities and antitrust theory, has no clean English home, which is one reason this litigation is unfolding in New York and not London.

The forward-looking point is regulatory. The 2025 US federal stablecoin statute, the GENIUS Act, now imposes reserve-backing and disclosure obligations on payment stablecoin issuers, changing the evidential landscape for future conduct even as this case litigates a period that predates it. For issuers the immediate lesson is procedural. A certification that survives Rule 23(f) review sharpens settlement pressure well before any judgment on the merits, whatever the causation ruling ultimately holds.

Notes

¹ In re Tether and Bitfinex Crypto Asset Litigation, No. 19 Civ. 9236 (S.D.N.Y.); class-certification order signed 23 February 2026, redacted order entered March 2026. Second Circuit denial of the Rule 23(f) petition reported 2 July 2026 (Law360; MLex).

² Tyson Foods, Inc. v Bouaphakeo, 577 U.S. 442, 457 (2016) (failure of proof as to an element is a question for summary judgment, not class certification).

³ See Morrison v National Australia Bank Ltd, 561 U.S. 247 (2010); Absolute Activist Value Master Fund Ltd v Ficeto, 677 F.3d 60 (2d Cir 2012); Choi v Tower Research Capital LLC, 890 F.3d 60 (2d Cir 2018); In re Platinum and Palladium Antitrust Litigation, 61 F.4th 242 (2d Cir 2023); Williams v Binance, 96 F.4th 129 (2d Cir 2024) (test for domesticity of transactions on stateless exchanges).

⁴ CFTC Order, In re Tether Holdings Ltd (15 October 2021); Office of the New York State Attorney General, settlement with Bitfinex and Tether (23 February 2021).

⁵ Merricks v Mastercard Inc [2020] UKSC 51; Competition Act 1998, s 47B.