District Judge Katherine Polk Failla, who is presiding over the class-action lawsuit against Tether and its sister company Bitfinex, has granted motions to dismiss most of the claims in the case. A report unveiled this news on September 29, noting Tether and IFinex, Bitfinex’s parent firm, had previously filed motions to dismiss allegations of manipulating the crypto market. Reportedly, Judge Failla granted motions to dismiss five complete claims and part of another allegation.
According to the report, Judge Failla also denied six other claims, saying she would not let investors make any allegations against Tether and Bitfinex under the Racketeer Influenced and Corrupt Organizations Act (RICO). She also denied any claims related to racketeering or using the proceeds of racketeering for investments. Moreover, Judge Failla noted that Tether and Bitfinex’s investors could not inadequately allege the firms’ monopoly over the stablecoin market.
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Commenting on the latest development in the case, Tether published a blog post, saying,
We are grateful to Judge Failla for her meticulous opinion, which exposed many deficiencies in the plaintiffs’ claims.
Tether says the case against it is baseless
The stablecoin issuer added that the plaintiffs’ case is now in shambles, seeing as the Court raised substantial issues in the remaining claims. According to Tether, these developments will, ultimately, be fatal to the plaintiffs’ case. Tether added that Judge Failla has already dismissed half of the plaintiffs’ case, meaning the entire lawsuit is doomed. Confident that it will win the case, Tether said the turn of events is unsurprising because the plaintiffs’ claims are meritless.
The publication further noted that Tether and Bitfinex look forward to litigating this case, adding that litigation would expose the lawsuit as a clumsy attempt at a money grab. According to Tether, this case is anchored on baseless claims, which recklessly harm the entire crypto ecosystem.
This case started in October 2019 when the plaintiffs purported that IFinex had manipulated the crypto market by issuing unbacked Tether (USDT/USD). At the time, the plaintiffs argued that the organization sought to show the market and demand for cryptos was vast. They added that IFinex sought to inflate the prices of cryptos and sustain a bubble in the crypto market.
Before this, Tether and Bitfinex entered into a settlement with the Office of the New York Attorney General (NYAG) in February this year after agreeing to the mismanagement of USDT reserve funds. The settlement involved the firms paying $18.50 million (£13.74 million) for damages. On top of this, NYAG demanded that the companies submit quarterly reporting of their reserves on top of halting trading with New York residents.
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