Debevoise & Plimpton LLP delivered a decisive legal victory for clients Tether and Bitfinex, securing the dismissal of a class-action lawsuit in the U.S. District Court for the Southern District of New York (SDNY). The ruling underscores the resilience of stablecoin USDT’s market integrity and rebukes unsubstantiated claims about its reserve backing.
Case Background: Plaintiffs’ Allegations
The 2021 lawsuit, filed by purchasers of Tether’s USDT stablecoin, accused Tether and Bitfinex of misrepresenting the sufficiency of reserves backing USDT. Plaintiffs claimed they relied on these allegedly false statements when purchasing USDT and asserted:
- Breach of contract
- Unjust enrichment
- Violations of state deceptive trade practices laws
👉 Understanding stablecoin regulations
Debevoise’s Key Arguments
In May 2022, Debevoise moved to dismiss the case, presenting two core defenses:
- Lack of Article III Standing: Plaintiffs failed to demonstrate any actual injury.
- Failure to State a Claim: No legal basis supported the allegations.
The team highlighted USDT’s stable $1 peg—proven by historical market data—and noted plaintiffs could sell their tokens at parity if concerned about reserves.
Court’s Ruling: A Total Dismissal
On August 4, Judge Laura Taylor Swain sided entirely with Debevoise, dismissing the lawsuit due to:
- No factual injury shown by plaintiffs.
- Inapplicable precedents: Unlike consumer goods, USDT’s value matched its advertised price ($1).
Core Keywords
- Stablecoin USDT
- Class-action lawsuit
- Tether reserves
- Debevoise & Plimpton
- SDNY ruling
- Cryptocurrency litigation
FAQ Section
Q1: What was the plaintiffs’ main claim against Tether/Bitfinex?
A: They alleged false statements about USDT’s reserve backing, claiming financial harm.
Q2: Why did the court dismiss the lawsuit?
A: Plaintiffs lacked standing (no proven injury) and failed to substantiate claims.
Q3: How did Debevoise prove USDT maintained its $1 peg?
A: By submitting historical market price data showing consistent parity.
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Final Thoughts
This ruling reinforces Tether’s market position and sets a precedent for dismissing unmerited crypto lawsuits. For projects navigating regulatory complexities, robust legal strategy is paramount.
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