A recent development saw a United States judge dismissing a lawsuit against the prominent decentralized finance (DeFi) platform PoolTogether. The ruling concluded that the federal court system was not the appropriate venue to address concerns related to the DeFi startup.
US District Court Judge Frederic Block acknowledged the genuine concerns raised about the startup but deemed that a federal court was not the suitable platform to address them. The judge further stated that the plaintiff, Joseph Kent, lacked standing to pursue the lawsuit as he had not suffered any concrete harm at the hands of the defendants. The court order clarified that the Court finds that Kent lacks standing to sue and, consequently, grants the defendants’ motions to dismiss on those grounds. The alternative motions to compel arbitration are dismissed as moot.
Kent’s lawsuit, filed in October 2021, accused PoolTogether of violating gambling laws in the state of New York by facilitating the circumvention of financial regulations and deceiving consumers, likening the platform to an “old-fashioned numbers racket.”
However, the judge highlighted that the injury claimed by Kent must align with the injuries for which he seeks redress in the court. In this case, the judge determined a mismatch between the two. Consequently, the case was dismissed.
Notwithstanding the dismissal, the judge clarified that Kent remains free to pursue his claims in state court, while unresolved ancillary issues raised in the dismissal motions should be addressed by the New York Court of Appeals.
Community Show Support for PoolTogether
The community celebrated the ruling, with several members expressing joy over their nonfungible tokens (NFTs) gaining utility and showing their unwavering support.
Back in 2022, PoolTogether successfully raised 769 Ether, equivalent to approximately $1.4 million at that time, through the sale of PoolyNFTs. These funds were utilized to defend against the lawsuit, which many community members perceived as a broader assault on the entire DeFi industry.
