Many heads have turned to the idea that a token that is meant to serve as a backed stablecoin may in fact be a game-play. In Tether enters. These were heavy considerations especially with all the beauty that happens in the crypto world.
Here’s a quick look at what happened during the trials earlier this year, and how things have gone for the parties involved since then.
New York State of Affairs
A complaint filed earlier this year claimed that Tether (USDT) had knowledge about the volatility of the total cryptocurrency market cap, including a massive $795 billion market cap rally in late 2017. Five cryptocurrency traders were the plaintiffs. who claimed to have bought cryptocurrencies at inflated prices and suffered financial losses as a result of As a result, the lawsuit represented anyone in the United States who might have hurt price inflation during this time period.
Lawyers for the defendants argued that the case would fall apart, with Tether accused of printing its USDT fixed coins without any solid backing.
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Another lawsuit in 2019 resulted in a settlement for both parties. New York State Attorney General Letitia James announced that the bureau was investigating the Bitfinex case. What made things steady is that Tether has also come into the spotlight due to the exchange’s association with Bitfinex. The case concerned an alleged $850 million to cover up a loss. It also happened around the same time that the legal representatives of Tether admitted that the stablecoin was backed by only 74%.
Tether settled the case with the state of New York and as a result the cryptocurrency was banned from doing business in New York under the terms of the settlement agreement. Bitfinex and Tether did not admit to any wrongdoing, but the court imposed a heavy fine on the change, totaling about $18.5 million. The court also wanted Tether to submit quarterly reserve reports for the next two years.
Since 2019, the stablecoin has been involved in more lawsuits, both major and minor.
A 127-page court document along with the rest of the case can be found in the Bloomberg Law database. Many of these came from 2017, and most recently through 2019 — until recently when it all came to light after US District Judge Kathryn Polk Faila, who was leading the case, ruled in favor of cryptocurrency. Half of the allegations made by prosecutors against the defendants were dismissed. Tether and Bitfinex described the remaining claims as “not meritorious,” expressing that they are likely not ready to settle with the plaintiffs. Most of the complaints were subsequently dismissed, but Tether had to pay a fine of $18 million to settle the lawsuit.
It has been a notorious stablecoin journey as they face a backlash for what has happened thus far, and there are still fundamental questions today, but over the past week, Tether has partnered with Notabene in an effort to combat money laundering and cross-border crypto crime.