Judge Dismisses Class Action Lawsuit Against Tether and Bitfinex
A United States judge has officially dismissed a class action lawsuit against stablecoin issuer Tether and its affiliated crypto exchange Bitfinex, bringing an end to a two-year legal battle. Chief Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York denied Shawn Dolifka’s motion for leave to amend the class suit, and Dolifka has opted not to appeal the decision.
The Class Suit
The class suit was filed against Tether in October 2021 by Dolifka, who accused the company of misleading customers about its stablecoin, USDT, and creating a scheme to induce users to purchase the crypto asset. Along with Matthew Anderson, Dolifka alleged that Tether falsely represented USDT reserves, maintaining cash reserves that were less than 4% of the tokens in circulation. They also claimed that the reserves did not contain U.S. dollars and were mostly made up of overcollateralized loans and other undisclosed commercial paper. The lawsuit also alleged that USDT was not backed 1:1 with the U.S. dollar as Tether had claimed.
“Meritless Claims”
Tether responded to the lawsuit by calling it nonsense and a copycat attempt, stating that the plaintiffs and law firm were seeking a payout based on “meritless claims.” With Judge Taylor finalizing the dismissal of the lawsuit, Tether has reiterated its stance to never fall prey to “shameless litigation money grabs.” The company’s CEO, Paulo Ardoino, said that Dolifka’s decision to forego his appeal rights was correct since his claims were entirely meritless, and further litigation would not have resulted in any monetary compensation for him or his attorneys.
Hot Take: The Future for Tether and Bitfinex
The dismissal of this lawsuit is a significant win for Tether and Bitfinex, reaffirming their commitment to transparency and integrity in their operations. While legal battles can be disruptive and costly, this outcome strengthens confidence in these companies within the crypto community. Moving forward, it will be essential for Tether and Bitfinex to continue upholding their promises of transparency while remaining vigilant against future legal challenges.
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