Bitfinex And Tether Successfully Repel Class Action Lawsuit

In a significant turn of events, cryptocurrency entities Tether and Bitfinex have effectively repelled a class-action lawsuit. Shawn Dolifka, the plaintiff, alleged that Tether was not truthful regarding its reserves. According to the lawsuit, Bitfinex and Tether engaged in undisclosed, conflicted transactions to cover losses by transferring money out of Tether reserve funds. Nevertheless, the US District Court for the Southern District of New York has since dismissed this legal action.

Understanding the context

Tether was previously ordered to produce financial records relating to the backing of the USDT stablecoin by a US judge in New York as part of a lawsuit alleging that the company conspired to issue the stablecoin as part of an effort to inflate the price of Bitcoin (BTC).

Back in 2019, the New York State Attorney General (NYSAG) also sued Bitfinex, a popular cryptocurrency exchange. According to a 23 page document, the NYSAG had reason to believe that several New York based traders transacted on the exchange, despite Bitfinex claiming that it would no longer serve clients in the city in 2018.

Unsurprisingly, the NYSAG launched an investigation to expose ongoing fraud being carried out by the company and affiliated firms which led to it requesting any and all documentation related to Bitfinex users in the state of New York.

Crypto wins

Chief Judge Laura Taylor Swain rejected the plea put forth by Shawn to revise her complaint against the firms. Subsequent to this ruling, Dolifka opted against appealing, thereby solidifying the decision by Judge Swain to favor Tether and Bitfinex.

The official statement released by the USDT issuer and Bitfinex acknowledged the lawsuit as imprudent but commended the decision not to pursue an appeal. The companies asserted that the claims presented by the plaintiff lacked any validity and emphasized that continued legal proceedings would yield no financial or other benefits for him or his legal representatives.

The statement concluded with a resolute assertion by both companies, stating that both as of now and in the future, Tether and Bitfinex have never nor ever will succumb to baseless lawsuits aimed at extracting monetary gains.