Judge Gives 90-Day Extension for NYAG’s Bitfinex and Tether Investigation

New York Supreme Court Judge, Joel M. Cohen has recently given a 90-day extension on an investigation involving both crypto exchanges, Bitfinex, and Tether report Coin Desk. Such decision was made because Cohen still needed some time to finalize his concluding say. More specifically, he was quoted saying:

“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.”

With the given extension, operations on both Bitfinex and Tether’s end do not need to be halted, however, both involved parties trust that the NYAG shouldn’t be getting involved in the first place. Before emphasizing on the latter, here’s what happened:

Tracing Back Past Events

According to the claims made, Bitfinex incurred $850 million in losses, and as a way to conceal the missing funds, the crypto exchange supposedly took the exact amounts from the Tether reserve. Since both parties have mutual executives involved, Tether had approved a $900 million line of credit to Bitfinex.

NYAG Letitia James was the one to have revealed the news regarding said court filing back in April reports Coin Telegraph, in which it was noted that those involved in Bitfinex and Tether have violated the New York law.

As for the NYAG office, they claim that they have “sufficient jurisdiction,” as it such activities can pose a risk to New York residents. Coin Desk referenced The Block, which gave an example of a New Yorker who was able to sign up with Bitfinex in “early 2019”. This was allegedly confirmed by the latter.

iFinex, the sole operator of Bitfinex supposedly applied to have the case closed, as it is believed that New York regulators lack authority to take on this role. In particular, the argument made is that Bitfinex wasn’t operating in New York when the loss was incurred.

Here’s a statement that lawyers on Bitfinex and Tether’s side released:

“For purposes of personal jurisdiction, OAG cannot show Respondents engaged in any busy activity purposefully directed at New York. OAG tries to confuse matters by referring to isolated instances where Respondents’ foreign customers have shareholders […] in New York. But in those circumstances, Respondents’ counterparties […] are the foreign entities.”