NYAG Disagrees With Bitfinex’s Claims of Tether Stablecoin Investigation Being Onerous

    As you may know, the New York Attorney General’s office (NYAG) is during a case against Bitfinex and Tether. The companies, which are a crypto exchange and a stablecoin provider, were accused of sharing money in an illegal way. Now, the NYAG decided to disagree with Bitfinex’s claims that it is being too expensive to provide the investigation asked by the judge.

    Recently, Bitfinex complained to the New York State Supreme Court that it had spent $500,000 USD in order to have 60 lawyers finding the documents that the NYAG has recently asked for. According to the company, 10 different communication systems are being used, which ramped up the costs of the investigation.

    However, the NYAG also sent a letter to the local Supreme Court affirming that any responsible trading platform should have the kind of information that was asked “at its fingertips” since most of the information was essential.

    Because of this, the NYAG accused Bitfinex of complaining too much about how hard it was to get the necessary information, as there was nothing too hard to acquire.

    Most of the information included tax filings, client accounts information, information from clients who wanted to withdrawal money, of the company’s line of credit transactions and other similar stuff. This all, the NYAG claimed, was essential to run a business so it made no sense that the company claimed that it spends half a million dollars chasing this information.

    Because of this, Bitfinex and Tether lost the appeal. The judge in the case, Judge Joel M. Cohen, dismissed their stay of proceedings.

    The Case

    This all started after Tether lent $850 million USD to Bitfinex, its sister company. Tether is the famous stablecoin, you know, and, according to the law, it should not lend the money that is used to back the tokens. However, one of the payment processors that worked with Bitfinex had not paid it, which is why the money was lent.

    The NYAG started to investigate the case and it is currently looking for more information about the deal in order to determine whether Tether and Bitfinex operated illegally. Now, the company would have to turn over the documents, which they deemed to be

    “too costly”.

    Another important part of the case is whether the NYAG actually has jurisdiction over the case or not. Bitfinex argued that it had no clients in the state, so the NYAG was out of bounds.

    Judge Cohen disagreed, though. According to him, NY residents have a public interest in the case, so Bitfinex needs to disclose its documents and stop complaining about it.

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    Gabriel Machado
    Brazilian journalist who is interested in the future of the financial world. Has a special interest in the blockchain technology and the global financial markets. Covers economic and technology news with a focus on the fintech industry and has been writing about the cryptocurrency market since the start of 2017.

    [Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

    [Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


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