According to a recent statement issued by Tether, the main issuer of a leading stablecoin, a class-action lawsuit against the company and the Bitfinex exchange has been definitively dismissed. The United States District Court for the Southern District of New York rejected the petition filed by Shawn Dolifka, who decided not to appeal the ruling.
Closure of the Case Against Tether and Bitfinex
After considering and dismissing the collective complaint filed by Dolifka against Tether and Bitfinex, the case has officially ended. The court found that Dolifka’s allegations were not sufficiently substantiated. The issue revolved around Tether allegedly misleading about the backing of their stablecoin, claiming it was backed one-to-one by the U.S. dollar.
Lack of Evidence for Tether’s Fraud
Judge Laura Taylor Swain ruled that the plaintiffs failed to provide sufficient evidence that they were indeed misled by false statements from the issuer when purchasing USDT. There was also a lack of credible allegations of harm, as no evidence was presented to show a decrease in USDT’s value.
The Security of Tether in Question
The theory that Tether does not have adequate reserves for its stablecoin was contested, but this issue has not been conclusively proven. In their latest quarterly report, Tether announced that their cash and cash equivalents constitute a significant percentage of their total reserves, with a large portion invested in U.S. Treasury bills.
Response from Tether and Bitfinex
Tether and Bitfinex stated that Dolifka’s accusations were baseless and that further legal proceedings would not alter the outcome of the case. The companies also declared their readiness to continue fighting against attempts at monetary extortion in legal disputes. Tether and Bitfinex claim that the accusations were an attempt to secure monetary compensation through legal settlements, which has ultimately been rejected by the court.