Tether and its sister company, Bitfinex, which are both owned by iFinex, have achieved a significant legal victory as a U.S. court has thrown out a class-action lawsuit against them. Chief Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York ordered the complete dismissal of the lawsuit brought by Matthew Anderson and Shawn Dolifka against Tether and Bitfinex.
The court ruled that the plaintiffs’ complaint lacked plausible allegations of injury and failed to provide any evidence of diminished actual value for the USDT stablecoin.
The lawsuit, initiated in December 2021, centered around allegations concerning Tether’s stablecoin backing. However, the court’s recent decision to dismiss the case at an early stage suggests that the plaintiffs’ claims lacked legal merit.
In a similar vein, U.S. crypto exchange Coinbase also sought a dismissal of an SEC complaint against it, citing the recent Ripple ruling that determined XRP was not a security when traded on exchanges.
Furthermore, Tether reported in a BDO assurance opinion for the second quarter of 2023 that its excess reserves increased by $850 million.
Excess reserves represent the company’s profits not distributed to shareholders, which Tether chose to maintain in addition to the 100% reserves backing all outstanding tokens.
Tether noted in the report that its reserves are exceptionally liquid, with 85% of its investments held in cash and cash equivalents. During the period from April to June 2023, the company’s operational profits exceeded $1 billion, demonstrating a strong 30% quarter-over-quarter growth.
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