Tether declared a legal victory on August 4th, as it reported that a class-action lawsuit concerning its USDT stablecoin had been dismissed in court.
The lawsuit originated in December 2021, with plaintiffs Matthew Anderson and Shawn Dolifka making allegations about USDT’s financial backing. These claims were based on variable statements about Tether’s own reserve composition from the New York Attorney General (NYAG) and the Commodity Futures Trading Commission (CFTC).
Tether now indicates that the U.S. District Court for the Southern District of New York found the lawsuit to be without merit. The court determined that the plaintiffs were unable to establish a decrease in USDT’s value, therefore, valid claims of injury were not present.
Tether stated that such an early dismissal of the legal process demonstrates that there were no valid legal claims brought forth by the plaintiffs.
Following the legal victory, representatives from Tether and Bitfinex reiterated their commitment to customer protection and ongoing services. Company members emphasized they are “remain laser focused” on upholding the promises made to the community.
Plaintiffs Unable to Demonstrate Inqury
In the original lawsuit filings, the plaintiffs did not detail any fluctuation in the price of USDT that could affect the value of their investments.
Tether subsequently argued that for the plaintiffs to establish an injury, they need to show a decrease in the value of USDT. A case based on the value of USDT seems unenforceable, as the stablecoin maintained its $1.00 price peg generally, despite minor variations.
Instead of pursuing this line of defense, the plaintiffs stated that Tether’s insistence on demonstrating injury through a decrease in USDT value was misleading and pointed to precedents in other legal cases.
The plaintiffs indicated that if they had known about the nature of USDT’s reserves, they would not have purchased USDT or would have bought less.
Originally, the plaintiffs sought monetary damages. They also sought injunctions to force Tether to stop making statements suggesting that USDT reserves were fully backed at a 1:1 ratio by U.S. dollars and to stop misrepresenting the composition of its reserves.
