Judge dismisses Tether, Bitfinex class action lawsuit

Tether, the company that issues USDT, has announced that a court in New York has dismissed a class action lawsuit that was filed against them and Bitfinex.

The order was issued by US District Court Judge Laura Talyor Swain in response to the lawsuit brought by Matthew Anderson and Shawn Dolifika. 

Paolo Ardoino, the CTO of Tether and Bitfinex, also confirmed the news on X, formerly Twitter. 

In 2021, Anderson and Dolifika took legal action against Tether and Bitfinex, alleging that they deceived USDT users about the coin’s reserves.

They argued that Tether’s reserves were not solely in USD but were a combination of other assets such as overcollateralized loans and undisclosed commercial papers.

These claims were supported by evidence from the New York Attorney General (NYAG) and the Commodities Futures Trading Commission (CFTC) based on Tether’s changing statements about the composition of its reserves. 

The two plaintiffs asserted that if they had been aware of the true nature of USDT’s reserves, they would not have bought it or purchased a lower amount.

At first, Anderson and Dolifika requested compensation and injunctions to force Tether to reveal that USD did not fully back USDT reserves on a 1:1 basis.

However, they did not provide evidence of USDT price fluctuations that could have negatively impacted their holdings. 

Tether exploited this vulnerability to bolster their argument, asserting that the plaintiffs needed to vividly showcase a noticeable decrease in the value of USDT as evidence of the inflicted damage.

As a result, the court determined that the plaintiffs’ claims of harm were unsupported since they could not demonstrate if their USDT amount had decreased.

Paolo Ardoino, the CTO of Tether, recently expressed concerns about the stability of the stablecoin market. He implied that there were malicious efforts to depeg USDT, blaming FDUSD creators.

USDT is currently the most dominant stablecoin in the market. Their latest report reveals that USDT’s circulating supply reached an all-time high of $83.9 billion, representing over 66% of the market share.