NYAG Continues To Investigate Bitfinex Exchange And Tether As Court Denies iFinex’s “Stay” Motion


  • iFinex’s motion for a temporary stay of the investigation is denied
  • Letitia James of NYAG to resume investigation into Tether as “Securities or Commodities” & Bitfienx’s presence in New York

The Supreme Court of the State of New York has denied the motion of iFinex, the company behind the exchange Bitfinex and stablecoin Tether, for a temporary stay on the NYAG investigation.

The company was seeking to terminate the investigation on the grounds that the court lacks “personal and subject matter jurisdiction” because Bitfinex is an off-shore cryptocurrency exchange and does not have a connection to New York.

But now…

“Respondents’ (iFinex) motion is denied, and the temporary stay of the investigation is dissolved,”

the court ordered.

Tether As “Securities Or Commodities” & Bitfienx’s Presence In New York

The basic facts regarding the scope of the investigation and iFinex’s businesses involve Tether as “Securities or Commodities” where iFinex contends that Tether tokens do not constitute an ownership interest in Tether and stablecoins are not bought for investment purposes rather facilitates other virtual currency transactions.

Letitia James of NYAG meanwhile, wants to gather more facts “before a determination is made.”

As for Bitfienx’s presence in New York, iFinex insists that they have purposefully avoided contact with New York and in January 2017 revised its Terms of Service to ban New York customers from using its trading platform.

However, James counters that the investigation concerns activities dating back to at least January 2015 and that there is evidence that Bitfinex allowed some customers located in New York to transact on its platform after changing the terms.

It further knowingly permitted traders to use the exchange, loan tethers to New York-based virtual currency trading firm, and opened accounts and utilized services at New York-based banks.

Now that the iFinex warranting a stay— even though substantial costs are expected to incur in continuing to comply with the order — is denied, NYAG will continue its investigation.

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