Bitfinex VS NYAG’s office, Judgement detianed

Bitfinex and Tether have been involved in an on-going case with the New York Attorney General’s office who claimed that Bitfinex covered up an $850 million loss which held by one their third-party payment processors Crypto Capital. The exchange allegedly filled the huge gap in its books by borrowing $900 million from its sister company Tether. Both the companies share some key executives and ownership, they claim that the $900 million loans were negotiated on independent terms and were not a cover-up.  

All of this was not disclosed to the investors until the NY attorney general accused Bitfinex and its affiliate Tether Ltd. of covering up the $850 million loss. Tether is one of the worlds most traded cryptocurrency because of its close to dollar value and stability. The acquisition raised many doubts. The money is believed to be frozen in multiple accounts controlled by Crypto Capital according to Bitfinex’s statement at the New York Attorney General’s office. The companies have previously argued that the NYAG’s office did not have any jurisdiction in this case, whereas the NYAG’s office mentioned that they have sufficient jurisdiction to investigate whether any harm befell New York residents

Judgement could be delayed for 90 days                                                              

Recently, reports state that New York Supreme court Judge Joel M. Cohen said that he needs more time before he takes a decision as to whether crypto exchange Bitfinex and stablecoin issuer Tether needs to provide the documents related to the $900 million lines of credit or whether the NYAG’s case will be dismissed entirely. The preliminary injunction filed earlier in May could be extended for 90 days. Cohen said:

“I will extend the injunction … if I dismiss the case then obviously the injunction goes with it. If I don’t dismiss the case the injunction will be extended,” he further added, “The idea is to keep things where they are until the decision of this motion, so the decision is to extend the stay and … extend the injunction.”

The ruling would mean that both the businesses can operate as usual, but Tether won’t be able to lend any more funds to Bitfinex. Bitfinex attorney still adheres to their argument that the New York entities are foreign eligible contract participants (ECPs), these are basically entities that possess a New York addresses but aren’t based in Empire State. Based on this, they argue that New York regulators lack jurisdiction on this matter.