Tether prevails in class action suit, but USDT is still not in hot water
- Tether won the legal battle after the judge ruled lack of legal merit.
- USDT caught up in Chinese investigations on possible money laundering.
Stablecoins present an ideal way of tracking crypto liquidity. As such, USDT activity and status usually offer a rough idea of the current state of the market. USDT has had a lot going on lately and here are the main developments.
Tether, the company behind the USDT stablecoin was in celebratory mode after securing a win against a class action suit. Recent announcements confirmed that a U.S. district court in New York ruled in favor of the stablecoin issuer in the legal battle.
The filing stated that Tether was not liable for any injury allegations as per the plaintiff’s claim because USDT did not suffer loss of value.
Tether and Bitfinex Win Comprehensive Legal Victory as U.S. District Court Dismisses Class Action Lawsuithttps://t.co/lyWxAQTDzl
— Tether (@Tether_to) August 4, 2023
The ruling, which was made in the early stages of the class action suit, cited a lack of legal merit on the plaintiff’s side. As such, their lawsuit was void.
The lawsuit was filed at a time when crypto companies have become victims of attacks aimed at discrediting their operations. A ruling against the company, especially in terms of its stablecoin operations, would likely have had a negative impact on USDT, perhaps triggering liquidity outflows.
Glassnode’s USDT flow data reveals that there were more USDT receiving addresses than sending addresses. This reflects the prevailing market conditions marked by low demand for cryptocurrencies. As a result, more traders have been holding some dry powder in the form of USDT.
China investigates USDT settlements on gambling websites
While Tether’s win against the class action suit represents good news, USDT has somehow managed to find itself in the middle of another controversy. Recent reports revealed that Chinese police are currently investigating offshore exchanges. Chinese investigators have reportedly detained some of the senior executives of said exchanges as part of investigations regarding the use of stablecoin settlement on gambling websites.
Exclusive: Recently, a large number of senior executives of offshore cryptocurrency exchanges, such as CTO CHO, have been detained and investigated by the Chinese police for allegedly providing fund payment and settlement services for gambling websites.
— Wu Blockchain (@WuBlockchain) August 5, 2023
What’s more interesting about the investigation is that the offshore exchanges and gambling sites moved over $7.6 billion USDT in the last 12 months. Such a large sum of money has warranted investigations into whether they are a conduit for money laundering.
Claims about cryptocurrencies and stablecoins being involved in money laundering are bound to occur after such incidents. However, the reality is that it is much easier to trade transactions used for malicious intent using stablecoins. In other words, USDT will make it easier for investigators to track transactions.