According to Bloomberg Law, a New York judge on Thursday removed Roche Freedman from representing plaintiffs in a class action lawsuit accusing Bitfinex and Tether, the issuer of the USDT stablecoin, of market manipulation.
The videos posted on a website called Crypto Leaks in August showing founding partner Kyle Roche boasting about the law firm’s relationship with the crypto startup Ava Labs looks like the reason for removal. However, Roche has denied these allegations.
In a hearing on Thursday, Katherine Polk Failla, a U.S. district judge for the Southern District of New York, warned that the firm’s continued participation in the case could derail litigation. She said she would modify her initial lead counsel appointment to remove the firm.
Failla further added that allowing the firm to continue serving as counsel “with the metaphorical baggage they now carry is not in the best interests of the class.”
Faila said Roche’s comments were “stupid” but argued there was no evidence Roche Freedman brought a lawsuit to help Ava Labs and that concerns about the law firm abusing discovery were unfounded.
Following the leak, Bitfinex and Tether filed a motion to have Roche Freedman removed from the case on the grounds that the remarks created questions about the firm’s intentions.
A separate plaintiffs firm filed a motion to substitute Roche Freedman as lead counsel, but Failla on Thursday rejected that application.
Roche had already withdrawn from legal proceedings against Tether, Bitfinex, Tron Foundation, Nexo Capital, BAM Trading, Dfinity, and Solana Labs. Roche also withdrew from a class-action lawsuit against several universities.
Failla, however, said that Roche’s comments were “too detailed to dismiss out of hand.” The putative class also will not suffer from any diminished quality of legal representation with the law firm’s removal, she concluded.
Tether was pleased with the Court’s decision to remove Roche Freedman LLP as interim class counsel.
