TL;DR Breakdown
- Tether dragged to court again over its stablecoin USDT.
- Plaintiff alleges that USDT is not backed by 1:1 dollar reserves.
- Firm calls lawsuit nonsense, threatens counter action.
Number one, stablecoin issuer USDT – Tether has been dragged to the district court of south New York in a class-action lawsuit by one Matthew Anderson and Shawn Dolika.
The plaintiffs alleged that the stablecoin issuer of misleading the consumers regarding the attributes of USDT tokens. They claim that USDT is not backed by 1:1 dollar reserves describing the stablecoin issuer practices as immoral, unethical, oppressive, and unscrupulous.
However, it is not the first time tether has been dragged to court for a similar issue. The claim has been challenged in court twice already this year.
The lawsuit also accused the stablecoin issuer of maintaining less than 4% in cash reserves and not undergoing a single professional audit despite promising transparency to its consumers. The plaintiff also claimed that the stablecoin entity breached the contract, qualifying the plaintiffs and members for “compensatory and consequential damages.”
Tether fires back calls it “Nonsense and Copycat”
In a heated response to the lawsuit, Paulo Arduino, the Chief Technology Officer of Bitfinex and Tether, said that “another lawsuit will bite to dust.”
The firm called the suit “nonsense” and “a copycat” that was filed by two plaintiffs and their law firm looking to churn out massive payout on “meritless claims.” They further called the suit “shameless money grabs, for which this lawsuit is a textbook example, will never be dignified by way of paying one Satoshi in a settlement.”
The stablecoin issuer said it will “aggressively litigate and dispense with the action in due course, and then pursue their remedies against the filing parties.”
As previously stated, it is not the first time Tether would be dragged to court over its stablecoin, USDT. In February, New York Attorney General Letitia James ordered Tether and crypto exchange Bitfinex, a sister company with common shareholders and management, to cease trading in New York and pay $18.5 million, after state investigations concluded that Tether didn’t have sufficient reserves to back the number of Tether USDT tokens in circulation.
The stablecoin issuer has often been indicted for mismanagement of its funds and misleading users about its USDT reserves.
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