Tether Holdings, the issuer of the USDT stablecoin, have now recorded a legal victory after a US court struck out a class action lawsuit against the stablecoin issuer and Bitfinex for lack of merit.
According to the judgment delivered by Chief Judge Laura Taylor Swain of the U.S. District Court for the Southern District Of New York, the lawsuit which challenged the veracity of Tether’s reserves statement lacked any “plausible allegations to injury” after the plaintiffs failed to prove that the value of USDT was affected.
Consequently, the judge has denied the plaintiffs’ request for financial compensation and an injunction compelling Tether to reveal the composition of its stablecoin reserve which it argues is not correctly pegged to the US dollar.
Lawsuit Question Tether’s Reserve Composition
Interestingly the lawsuit was filed by Matthew Anderson and Shawn Dolifka back in December 2021. The plaintiffs alleged that Tether’s USDT’s backing claims were unfounded. According to the plaintiffs the stablecoin issuer failed to maintain the same amount of reserves as Tether tokens in circulation.
Furthermore, the lawsuit argues that these reserves comprised other assets including over collateralized loans and undisclosed commercial papers. In its defense, Tether said it has consistently maintained a 1:1 pegging. Following this victory, Tether has assured its users of delivering on its promises while ensuring community protection
Tether on Track to Overtake MicroStrategy
In its bid to outpace MicroStrategy, one of the famous institutional buyers of Bitcoin, Tether reported the acquisition of an additional 52,670 BTC in its Q1 2023 reports. Evidently, the açquisition reflects Tether’s optimism about the future possibilities of Bitcoin and also improves its position as an institutional holder of the digital asset. It is currently ranked eleventh.
Specifically, the CEO of JAN3, Samson Mow highlighted that Tether might reach a base of roughly 200,000 coins per year, if it maintains its current accumulation and pace, perhaps beating MicroStrategy.
Tether Increases Profit Despite Industry Challenges
Interestingly, Tether earned approximately $700 million in profit at the end of last year, despite the massive damage that the crypto industry took last year, as well as the bankruptcy of some crypto exchanges. According to the blockchain-enabled platform, the profit earned made the value of its consolidated assets exceed the total of the consolidated liabilities.