Federal Judge Dismisses Lawsuit Against DeFi Platform PoolTogether
A federal judge in the United States recently dismissed a lawsuit against the decentralized finance (DeFi) platform PoolTogether, ruling that a federal court is not the appropriate venue for addressing concerns related to the startup.
U.S. Judge Frederic Block stated that while there were genuine concerns about the startup, a federal court lawsuit was unsuitable for addressing them. The judge also concluded that the plaintiff, Joseph Kent, lacked standing to pursue the lawsuit since he did not suffer any tangible harm from the defendants.
Consequently, the court held that Kent lacked standing to sue and granted the defendant’s motions to dismiss on those grounds. The alternative motions to compel arbitration were denied as unnecessary.
Kent filed the lawsuit in October 2021, alleging that the DeFi startup violated gambling laws in New York state by enabling individuals to bypass financial regulations and defraud consumers. Kent described the platform as resembling an “old-fashioned numbers racket.”
However, the judge determined that the injury claimed by Kent must be similar to the injuries for which he sought a remedy in federal court, and in this case, there was a mismatch. As a result, the case was dismissed.
READ MORE: Germany’s Recession Sparks Concerns of Global Bankruptcy – Robert Kiyosaki
Despite the dismissal, the judge stated that Kent is free to pursue his claims in state court, and the New York Court of Appeals should resolve any outstanding issues raised in the dismissal motions.
In 2022, the DeFi startup raised 769 Ether (equivalent to around $1.4 million at the time) by selling PoolyNFTs, using the funds to combat the lawsuit. Some community members believed the lawsuit to be an attack on the DeFi sector as a whole.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
