Bitfinex And Tether Win Stay In $900 Million New York Supreme Court Case
Cryptocurrency exchange Bitfinex has won a motion in the appellate division of the New York Supreme Court, which means it won’t have to turn over documents pertaining to its use of the cryptocurrency Tether until a future date, if at all.
Tether, a so-called stablecoin is supposed to be backed on a one-to-one basis by the U.S. dollar, however New York attorney general Letitia James in April accused the company behind Tether of essentially minting the cryptocurrency for Bitfinex to the tune of as much as $900 million.
If the stay had been rejected, Bitfinex parent company iFinex would have been required to continue turning over documents pertaining to Bitfinex and the Tether cryptocurrency. A court document dated today is being presented as a “victory,” by a person familiar with the case speaking on background, but it’s only a partial win.
The parent company of the Hong Kong-based cryptocurrency exchange was sued by New York attorney general James in April, following allegations that the company was given what amounts to a line of credit from Tether Holdings Limited, the maker of the Tether cryptocurrency, a stablecoin widely used in the cryptocurrency space to enter and exit investments. Tether’s market cap is currently $4.11 billion, with a daily volume of $24 billion, according to CoinMarketCap.com.
Importantly, no official complaint has even been filed against Bitfinex or Tether as pertains to this motion. Rather, today’s motion means that the companies will not have to provide documents about their relationship to investigators until a decision on an appeal to dismiss the entire case has been reached. In August, Justice Joel M. Cohen declined a similar request sent on behalf of Tether.
The New York attorney general’s office confirmed that while the the partial stay means the companies won’t have to turn over the paperwork in question they could still be required to do so at a future date. “The injunction that prohibits the movement of money between Tether and Bitfinex is still in place,” says a spokesperson of the attorney general’s office. “We look forward to making our case in court as we seek to have Judge Cohen’s decision upheld and continue our investigation.”
A representative of iFinex and Tether Holdings Limited, speaking in similar terms, said: “We are gratified by the panel’s decision and we look forward to addressing the significant substantive issues before the appellate court.”
While the decision is certainly a set back for the attorney general’s office investigating Tether, Bitfinex and other related companies, it is not an end to the proceedings. The motion signed by a clerk today is granted on the condition that additional documents pertaining to the broader appeal for dismissal be filed by November 4, 2019. If the case is allowed to proceed actual arguments won’t likely begin until 2020.