In a significant legal victory for Tether and crypto exchange Bitfinex, a class action lawsuit filed against them has been dismissed by the U.S. District Court. The lawsuit, initiated by Matthew Anderson and Shawn Dolifka, questioned the legitimacy of Tether’s reserve statements.
The order was issued by Chief Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York. The judge’s decision was comprehensive and incisive, dismissing the entire lawsuit due to a lack of “plausible allegations of injury”. The plaintiffs failed to provide any evidence showing that the value of USDT had diminished.
The lawsuit originated in 2021, with the plaintiffs alleging that Tether falsely claimed that USDT was backed one-to-one by the US dollar. They argued that Tether’s reserves were not solely in USD, but were a mix of other assets such as overcollateralized loans and undisclosed commercial papers.
Judge Found No Evidence of Harm or Fraud by Tether and Bitfinex
However, the court found that the plaintiffs’ claims of harm were unsupported as they could not demonstrate if their USDT amount had decreased. Tether leveraged this vulnerability in their defense, asserting that the plaintiffs needed to vividly showcase a noticeable decrease in the value of USDT as evidence of the inflicted damage.
In the previous month’s third-quarter attestation report, Tether disclosed that its total reserves were majorly made up of cash and cash equivalents, accounting for a record 85.7%. Tether further clarified that a significant portion of these reserves were in the form of U.S. Treasury Bills, amounting to $72.6 billion, both directly and indirectly.
This dismissal underscores the fact that the plaintiffs’ claims lacked any legal merit. Tether and Bitfinex celebrated this legal victory, stating that they remain focused on delivering on their promises and ensuring their customers and community are protected.
Despite facing legal challenges and receiving a ‘D’ rating from an independent agency, Tether maintains a commanding 66.7% market share with $83.9 billion in circulation. This legal victory is a significant milestone for Tether and Bitfinex, reinforcing their position in the stablecoin market.