In a recent development, a United States district court judge has ruled in favor of the decentralized finance (DeFi) platform PoolTogether, dismissing a lawsuit filed against the startup.
Judge Frederic Block stated that the federal court system is not the appropriate venue to address concerns related to the DeFi platform.
The plaintiff, Joseph Kent, filed the lawsuit in October 2021, alleging that PoolTogether had violated gambling laws in New York state, enabling individuals to bypass financial regulations and potentially scam consumers.
Kent further described the platform as resembling an “old-fashioned numbers racket.”
However, Judge Block determined that Kent lacked the standing to pursue the lawsuit as he had not suffered any tangible harm at the hands of the defendants.
He emphasized that a lawsuit in a federal court should only be pursued when the plaintiff’s claimed injury aligns with the injuries they seek to address. In this instance, the judge found a mismatch, leading to the dismissal of the case.
Despite the dismissal, Judge Block clarified that Kent remains free to pursue his claims in state court. Additionally, any ancillary matters arising from the dismissal motions should be resolved by the New York Court of Appeals.
Following the decision, the PoolTogether community expressed their joy and support for the platform.
Some members even suggested that their nonfungible tokens (NFTs) now hold utility, while others saw the lawsuit as an attack on the broader DeFi sector.
In 2022, PoolTogether successfully raised 769 Ether, equivalent to approximately $1.4 million at the time, by selling PoolyNFTs.
These funds were utilized to mount a defense against the lawsuit, with many community members viewing it as an attempt to undermine the entire DeFi industry.