Federal Court Dismisses Lawsuit Against PoolTogether

A magistrate in the United States recently dismissed a lawsuit against PoolTogether, a decentralized finance (DeFi) platform.

According to the decision, the federal court system is not the appropriate venue for voicing concerns about the DeFi startup.

Despite having genuine concerns about the startup, U.S. district court Judge Frederic Block stated that a lawsuit in federal court is “not the appropriate way to address them.”

In addition, the judge ruled that the plaintiff, Joseph Kent, lacks standing to file a lawsuit because he “suffered no concrete harm at the hands of the defendants.” The court order stated:

“Therefore, the Court holds that Kent lacks standing to sue and, accordingly, grants the defendants’ motions to dismiss on that ground. The alternative motions to compel arbitration are denied as moot.”

Kent’s lawsuit, filed in October 2021, alleged that the DeFi startup violated New york state gambling laws by allowing people to circumvent financial regulations and defraud consumers.

In addition, the platform was described as “an old-fashioned numbers racket.”

However, according to the judge, Kent’s alleged injury must be comparable to the ailments for which he seeks compensation in court. In this instance, the judge ruled that there was a mismatch. The case was ultimately dismissed.

Despite the decision, the judge stated that Kent is “free to pursue his claims in state court” and that unresolved ancillary issues raised in the dismissal motions should be “resolved by the New York Court of Appeals.”

Some community members stated that their nonfungible token (NFT) now has utility, while others supported it.

In 2022, the DeFi startup acquired 769 ether, or approximately $1.4 million, by selling PoolyNFTs.

The funds were used to defend against the litigation, which some community members perceived as an assault on the DeFi industry.