Bitfinex And Tether Respond To NY AG, Say The Martin Act Will Not Apply To USDT Stablecoin

Bitfinex And Tether Respond To NY AG

News recently came out that the New York Attorney General’s office launched an investigation as to how iFinex, the company behind Bitfinex and the Tether stablecoin allegedly lost $850 million. The funds are alleged to have disappeared in a deal with Pana-based Crypto Capital, a payment processor selected by Bitfinex. Bitfinex allegedly did not receive the funds back and is reported to have taken $700 million from its reserves that back US-dollar pegged Tether.

According to the AG Press Release,

“Those transactions – which also have not been disclosed to investors – treat Tether’s cash reserves as Bitfinex’s corporate slush fund, and are being used to hide Bitfinex’s massive, undisclosed losses and inability to handle customer withdrawals. The Office’s filings further detail how the companies obfuscated the extent and timing of these corporate transactions during the Office’s investigation.”

The press release also indicates that that the office “obtained a court order enjoining iFinex Inc., operator of the Bitfinex virtual currency, and their related entities, from further violations of New York Law in connection with an ongoing activities that may have defrauded New York Investors that trade in virtual or ‘crypto’ currency.”

iFinex announced that it filed a response and that the Attorney General’s court filings “were written in bad faith and are riddled with false assertions, including as to a purported $850 million ‘loss’ at Crypto Capital.” It also stated in its announcement that “On the contrary, we have been informed that these Crypto Capital amounts are not lost but have been, in fact, seized and safeguarded. We are and have been actively working to exercise our rights and remedies and get those funds released. Sadly, the New York Attorney General’s office seems to be intent on undermining those efforts to the detriment of our customers.”

iFinex continued that both Bitfinex and Tether are:

“Committed to fighting this gross overreach by the New York Attorney General’s office against companies that are good corporate citizens and strong supporters of law enforcement. Bitfinex and Tether will vigorously challenge this, and any and all other actions, by the New York Attorney General’s office.”