The plaintiffs believe that the endorsement of Tether tokens got misrepresented. Tether manifested its concern and pointed out that this non-sense lawsuit would fail.
Matthew Anderson and Shawn Dolika, two American citizens, filed a lawsuit against Tether Holdings Limited, the company that issued stablecoin USD Tether (USDT), for alleged illegal actions. Specifically, the Tether company got indicted for alleged immoral, oppressive, and unethical practices, according to a document filed in a district court in southern New York on December 11.
In the lawsuit, the statement indicts that the company would have consistently maintained that Tether tokens get backed up one by one by sufficient reserves in US dollars.
According to these statements, consumers, including plaintiffs, reasonably believed that each Tether token ran in parallel with one US dollar and got supported by one US dollar in reserves. But these representations were false.
Likewise, the lawsuit gets backed up by accusations made by the New York State Attorney General’s Office and the Commodity Futures Trading Commission. Both entities believe that Tether had misrepresented the endorsement of the Tether tokens and did not keep the same amount of reserves as the Tether tokens in circulation.
The accusation that gets reflected in the lawsuit is one made earlier this year by the New York State Attorney General’s Office. Tether faced accusations of bringing illegal services, covering up operations, and lying about the backing of the currency pegged to the dollar.
The company recently achieved an agreement with the legal entities of New York last February to pay a fine of USD 18.5 million and comply with the obligation to present constant reports that reflect all its financial operations.
Tether Says Plaintiffs Would end up Failing Miserably
After the accusation led by Anderson and Dolika, the company launched a brief statement on December 13. In there, the accused company pointed out that it is a nonsensical and imitation lawsuit to achieve a considerable payment based on totally without merit claims. They also pointed out that the plaintiffs’ efforts will fail miserably.
Bitfinex and Tether will aggressively dispense with the action in course, and then pursue the proper solutions against the entities bringing the lawsuit, added Tether.
Attempts to Appease Criticism
The company has tried to make peace, for months, with all the doubts and concerns that exist about its reservations. Last August, they presented a report that reflects the reserve support that the cryptocurrency has.
In the Consolidated Reserves Report (CRR), the company claims to have reserves of USD 62.8 billion, endorsed by the accounting firm Moore Cayman, based in the Cayman Islands.
There, the company highlighted that in cash and bank deposits, they have USD 6.28 billion, which represents 10% of the reserves. The company said it has USD 1 billion in reverse notes representing 1.6% of the reserves and USD 15.28 billion in United States Treasury bills. 49% (USD 30.8 billion) got held in commercial papers and certificates.
By: Jenson Nuñez
