Tether accused of unlawful and deceptive practices

Investors filed a class-action lawsuit against the issuer of the stablecoin Tether (USDT). They accused the company of “immoral, unethical, discriminatory and unscrupulous” practices.

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Plaintiffs Matthew Anderson and Shawn Dolifka challenged Tether’s assertions of full backing of USDT by assets. In their view, the company misled investors, otherwise they would not have purchased the stablecoin.

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The plaintiffs referenced proceedings involving the firm and its affiliate Bitfinex.

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Anderson and Dolifka sought treble damages, penalties and compensation for data theft, as well as court costs.

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Tether called the complaint “another baseless suit,” filed in pursuit of a “large payout on utterly unfounded claims.”

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“Shameless seizure of funds, for which this lawsuit is a textbook example, will never be worth paying even a single satoshi to settle the dispute. Bitfinex and Tether will take an aggressive line of defense during the litigation and defeat the suit, and then take steps to compensate for the losses,” the statement said.

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In February, the companies reached a settlement with the New York Attorney General’s Office over a financial operation related to the loss of $850 million. Bitfinex and Tether agreed to pay $18.5 million.

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The settlement of claims by the U.S. Commodity Futures Trading Commission in October cost the companies more — a civil penalty of $42.5 million.

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In September, a court dismissed half of the claims against Tether and Bitfinex in the previously filed class-action suit worth $1.4 trillion.

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The plaintiffs also pointed to these proceedings.

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Earlier in August, Tether published an audit report by Moore Cayman, which confirmed that USDT is 100% backed by assets. However, cash and bank deposits accounted for 10% of the reserves, and 49% consisted of commercial securities.

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Bloomberg found in the collateral for the stablecoin short-term loans to major Chinese companies and loans to crypto-lending platforms.

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In the research firm Hindenburg Research, they doubted the veracity of information about Tether’s reserves and offered a $1 million reward for disclosure of previously unknown information about them.

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