Tether, Bitfinex Gain Minor Legal Win From New York Supreme Court with Stay of Demands Granted
The sister companies Tether and Bitfinex have been granted a stay of demands today by the New York Supreme Court concerning the case in which the two companies are involved against the New York Attorney General. They tried to get the stay of demands yesterday and it was granted for them.
According to Judge Joel M. Cohen, from the NYSC, the companies will now only be required to produce documents and information regarding what is personally linked to the New York jurisdiction. All other documents will not need to be disclosed.
This is a huge win for the companies, which considered that it would be very onerous to produce such documents. Yesterday, the lawyers who represented the firms argued that the NYAG was out of its jurisdiction because the companies do not have any clients in the state. The NYAG was also using local laws to prosecute the companies, so it would be illegal to do it.
As both companies actually operated outside of the state of New York, the judge agreed in conceding to what they wanted. The companies have also introduced a motion to dismiss the whole proceedings for this same reason, the NYAG would be out of its legal jurisdiction. The hearing to dismiss the whole case will be done on July 29, 2019.
The Case Against Tether And Bitfinex
The case started in April when the New York Attorney General decided to prosecute Tether and Bitfinex because Tether lent money to cover an $850 million USD loss caused by a company that defrauded Bitfinex.
At the time, the filings indicated that Bitfinex never revealed the loss to the investors and that Tether engaged in illegal transactions to access its funds (which should be used to fund its stablecoin). After Bitfinex took around $700 million USD from Tether’s reserves, both companies ended in trouble with the law.
Now, the case just keeps getting more complicated as it was originally discovered that Tether even invested in Bitcoin. However, it was soon clarified that the company owns around 0.076 BTC only.