US citizens Matthew Anderson and Shawn Dolika filed a lawsuit against Tether Holdings Limited, the company responsible for issuing the stablecoin USD Tether (USDT), for alleged illegal actions.
Specifically, the Tether company was indicted for alleged “immoral, unethical, oppressive and unscrupulous” practices, according to a document filed in a district court in southern New York on December 11.
In the lawsuit, they indicate that the company would have “constantly maintained” that the Tether tokens are backed one by one by sufficient reserves in US dollars.
Given these statements, consumers, including plaintiffs, reasonably believed that each Tether token was equal to one US dollar and was backed by one US dollar in reserves. But these representations were false ”, it is indicated in the document.
Likewise, the demand relies on accusations made by the New York State Attorney General’s Office and the Commodity Futures Trading Commission. Both organizations considered that Tether had “misrepresented the endorsement of the Tether tokens and, in fact, did not keep the same amount of reserves as the Tether tokens in circulation.”
The accusation referred to in the lawsuit is one made earlier this year by the New York State Attorney General’s Office. There, Tether was indicated to offer services illegally, Covering up operations and lying about the backing of the currency pegged to the dollar.
On that occasion, the company reached an agreement with the legal authorities of New York, last February, to pay a fine of USD 18.5 million and the obligation to present quarterly reports that reflect its financial operations.
Tether Says Plaintiffs “Will Fail Miserably”
Faced with the accusation made by Anderson and Dolika, the company issued a brief release, on December 13. There they state that it is a “nonsensical and imitation lawsuit in search of a considerable payment based on totally without merit claims.” They also ruled that the plaintiffs’ efforts “will fail miserably.”
Shameless money appropriations, for which this lawsuit is a textbook example, will never be worth paying a single Satoshi in a settlement. Bitfinex and Tether will aggressively litigate and dispense with the action in due course, then pursue their solutions against the parties bringing the lawsuit, “added Tether.
Attempts to appease criticism
The company has tried to appease, for months, all the doubts that exist about its reservations. Last August, they presented a report reflecting the backup of reserves with which the cryptocurrency has.
At Consolidated Reserves Report(CRR), reported by CriptoNoticias claim to have reserves of USD 62.8 billion, endorsed by the Cayman Islands-based accounting firm Moore Cayman.
There they indicated that in cash and bank deposits they have USD 6.28 billion, which represents 10% of the reserves. They also showed that they have USD 1 billion in reverse repurchase notes, equal to 1.6% of reserves; as well as USD 15.28 billion in United States Treasury bills, corresponding to 24.3% of reserves. The remaining 49% (USD 30.8 billion) are held in commercial papers and certificates of deposit.
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Tether is now sued for alleged “unethical and immoral” practices