Federal Court Throws Out Lawsuit Against DeFi Platform PoolTogether

A recent ruling by a United States federal judge has resulted in the dismissal of a lawsuit against the decentralized finance (DeFi) platform PoolTogether.

The judge determined that a federal court was not the appropriate venue for addressing concerns related to the DeFi startup.

The lawsuit, filed by plaintiff Joseph Kent, alleged violations of gambling laws and consumer scams by PoolTogether in New York state.

However, the judge found that Kent lacked standing to pursue the case as he had not suffered concrete harm at the hands of the defendants. While the lawsuit was dismissed, the judge mentioned that Kent could pursue his claims in state court.

U.S. Judge Frederic Block ruled that despite genuine concerns raised about PoolTogether, a federal court was not the suitable forum to address them.

Judge Block stated that Kent lacked standing to sue and emphasized that there must be a direct connection between the claimed injury and the remedy sought in federal court.

As Kent had not suffered concrete harm, the judge granted the defendant’s motions to dismiss on those grounds. The court order also denied the alternative motions to compel arbitration as moot.

Joseph Kent filed the lawsuit against PoolTogether in October 2021, accusing the DeFi startup of violating gambling laws and engaging in financial scams that targeted consumers.

The lawsuit portrayed the platform as an “old-fashioned numbers racket.” However, the judge found a mismatch between the injury Kent claimed to have suffered and the injuries he sought to remedy through the federal court.

While the federal lawsuit was dismissed, the judge indicated that Kent is free to pursue his claims in state court.