Tether and Bitfinex Had Accounts with Us, but Only for Five Months: Metropolitan Commercial Bank

The case between Tether along with its affiliated companies and the New York Attorney General's (NYAG) office saw a new turn recently when it was revealed that Tether and Bitfinex were actually conducting business in New York, contrary to the claim of the attorneys representing the defendants. There is now evidence that the Metropolitan Commercial Bank based in New York operated accounts for Tether and Bitfinex.

Earlier in April, the New York Attorney General, Letitia James, announced that Bitfinex covered up an $850 million loss, discreetly using funds from Tether and in May, the defendants tried to have the case dismissed on the grounds that none of the companies were operating in New York. The NYAG’s Office has now filed new documentation that indicates the defendants operated accounts not only in the Metropolitan Commercial Bank but also at the Signature bank. Both banks are based in New York.

The filings made by the Attorney General's Office were up to 30 documents, some of which were discussed by Brian Whitehurst, the Assistant Attorney General. According to Whitehurst, the existence of these documents not only prove that Bitfinex had been operating in New York but that the defendants deliberately did not abide by the court’s order requiring them to disclose all information as they might pertain to the case.

“The OAG [Office of the Attorney General] has determined that in January 2019, Bitfinex opened a trading account with a New York-based virtual currency trading firm. Compiled at Exhibit R are redacted versions of email communications between this firm and respondents from January 2019. These documents do not appear to have been produced to the OAG by respondents following the court order directing a production of materials relevant to personal jurisdiction.”

For the Metropolitan Commercial Bank, the dealings it had with Tether, Bitfinex, and Digfinex were quite short-lived as they only lasted about 5 months. According to a staff at the Metropolitan, the accounts witnessed little activity even in the brief period it was active.

“Metropolitan Commercial Bank had limited corporate operating accounts with Tether Holdings LTD, iFinex Inc, and Digfinex Inc, all with negligible activity and requested the accounts to be closed after less than five months of the accounts being opened.”

According to this representative, the request for the closures came from the bank and not any of the companies. Now, with the presentation of these documents, it would seem that the NYAG has all it needs to secure a discharge of the defendants’ earlier motion for dismissal.

At the moment, there is no official statement from Signature bank as it has refused to make any comments on the issue.

A little over a week ago, the embattled Bitfinex announced that it had repaid a part of the loan to the tune of $100 million to Tether. According to the announcement, the payment was made through wire transfers to a bank account belonging to Tether and was done even though the payment was not yet due. Bitfinex announced that it believed it was in a good enough financial position to make the payments and went forward regardless.

The defendants are now expected to submit an official response to the recent motion put forward by the NYAG on or before the 22nd of July. Court hearings will resume a week after that, on the 29th.

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