Tether and Bitfinex, the sister entities owned by iFinex, have emerged victorious in a legal battle as a U.S. court dismissed a lawsuit filed against them. In a ruling by Chief Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York, the class action lawsuit brought by Matthew Anderson and Shawn Dolifka was completely dismissed. The court deemed that the plaintiffs’ complaint lacked plausible allegations of injury as it failed to provide any evidence that Tether’s USDT stablecoin had diminished value.
The dismissal of the case at an early stage suggests that the plaintiffs’ claims lacked legal merit, according to Tether. The lawsuit was initiated by Anderson and Dolifka in December 2021, questioning the backing of Tether’s USDTUSD stablecoin. On a similar note, U.S. cryptocurrency exchange Coinbase has also sought the dismissal of an SEC complaint against it, citing the recent Ripple ruling that determined XRP was not a security when traded on exchanges.
In another development, Tether has reported impressive operational profits in the second quarter of 2023. As per the BDO assurance opinion, Tether’s excess reserves saw an increase of $850 million. These excess reserves refer to profits retained by the company and not distributed to shareholders, ensuring the maintenance of 100% reserves to back all outstanding tokens. Tether highlighted that its reserves are highly liquid, with 85% of investments held in cash and cash equivalents. Furthermore, the company’s operational profits surpassed $1 billion from April 2023 to June 2023, showing a robust quarter-over-quarter growth of 30%.
As Tether and Bitfinex celebrate their legal victory, the cryptocurrency community continues to closely monitor the developments. The verdict could have implications for future cases involving stablecoins and their market perception. Additionally, Coinbase’s move to seek the dismissal of an SEC complaint adds another layer of complexity to the legal landscape surrounding cryptocurrencies.
It is important to note that Tether’s financial success and the legal victory do not absolve them of ongoing scrutiny. The cryptocurrency market remains an environment where regulatory oversight and investor confidence play significant roles. As the industry evolves, industry participants will need to navigate legal challenges and maintain compliance to ensure the market’s stability and sustainability.
Overall, Tether and Bitfinex’s legal victory and impressive operational profits indicate positive momentum for the companies. However, it is crucial for regulators and investors to closely monitor the cryptocurrency landscape and ensure transparency and accountability for the overall health of the market.
