U.S. Court Dismisses Major Lawsuit Against Tether and Bitfinex

A major lawsuit against Tether and Bitfinex, the company behind the USDT stablecoin, has been dismissed by a U.S. court. 

The lawsuit, started by Matthew Anderson and Shawn Dolifka in 2021, claimed that Tether falsely said each USDT was backed by one U.S. dollar. However, the court ruled in favor of Tether, stating the lawsuit didn't have strong enough claims of harm.

Anderson and Dolifka argued that Tether didn't have enough reserves to match the number of USDT in circulation. They said the reserves weren't just U.S. dollars, as Tether suggested, but also included over-collateralized loans and other types of assets. 

They claimed these actions made the stablecoin less valuable than Tether said.

But Tether argued the lawsuit didn't provide solid proof that the USDT's value had decreased. The court agreed with Tether, noting the lawsuit didn't have factual support for the claimed harm. 

Tether's CTO, Paolo Ardoino, supported the court's decision on Twitter, saying the lawsuit couldn't prove their claims of value loss. He also hinted at potential market manipulation aimed at devaluing USDT and mentioned a new competitor stablecoin, First Digital's FDUSD.

Despite controversy, USDT is still strong in the stablecoin market. It has reached a record high of $83.9 billion in circulation, taking a market share of 66.7%. In contrast, its competitor Circle's USDC has a supply of $26 billion, a 20.7% market share but has seen a 41.5% decrease since the start of 2023.

Last year, Tether and Bitfinex were fined over $42 million by the Commodity Futures Trading Commission (CFTC) for not always fully backing USDT. 

The US government is also looking into stablecoin rules and has proposed a new bill.