- A US judge dismissed a class action lawsuit against Tether and Bitfinex accusing them of misleading customers about USDT’s backing and reserves. Tether maintained the claims were meritless.
- The plaintiffs alleged Tether falsely claimed USDT was fully backed by US dollars when reserves were far less, and misrepresented USDT as a stablecoin when not truly pegged to USD.
- The dismissed lawsuit is the latest legal battle questioning whether USDT is truly backed 1:1 with dollars. Tether maintains reserves are solid, but doubts linger in the crypto community.
Tether has emerged victorious once again in its legal battle over the legitimacy of stablecoin USDT. A US judge has dismissed a class action lawsuit filed against Tether and crypto exchange Bitfinex in October 2021. The plaintiffs accused Tether of misleading customers about USDT’s backing and reserves. Tether maintained the claims were meritless. With the case now dismissed, Tether reiterated that it won’t fall prey to “shameless litigation money grabs.”
The Allegations Against Tether
The class action lawsuit was filed by Shawn Dolifka and Matthew Anderson in October 2021. The plaintiffs alleged that Tether made false claims about USDT’s backing and reserves.
Specifically, they accused Tether of:
- Falsely claiming USDT was fully backed 1:1 with US dollars when reserves were far less
- Maintaining reserves of less than 4% cash, with the rest in undisclosed assets
- Not undergoing professional audits despite promising transparency
- Misrepresenting USDT as a “stablecoin” when not truly pegged to USD
The plaintiffs sought compensatory and statutory damages, interest, and attorneys fees.
Tether Dismisses Claims as Meritless
Tether called the lawsuit “nonsense” and a “copycat” attempt to profit from meritless claims. CEO Paulo Ardoino predicted the claims would “bite the dust” like previous suits against Tether.
With the dismissal, Tether stated the plaintiffs’ claims were “entirely meritless” and no litigation would have resulted in a payout. Tether maintains it won’t fall prey to “shameless litigation money grabs.”
The Stablecoin Saga Continues
The dismissed lawsuit is just the latest chapter in Tether’s ongoing legal battles over USDT’s backing and whether it is truly a “stable” coin. Tether maintains its reserves are solid and that USDT is fully backed, but questions linger in the crypto community. With USDT still dominating stablecoin market share, the stakes remain high. For now, Tether has emerged unscathed once again. But the stablecoin saga continues.