Bitfinex-NY Attorney General Case: Injunction Extended

Published on by Cointele | Published on

This was to provide the OAG with more time to investigate its case but also to provide the judge himself with more time to decide whether to accept or reject iFinex's appeal to have the case dismissed, based on the alleged grounds that it doesn't operate in the state of New York.But even if the same Justice Cohen has previously criticized the attorney general's injunction for being "Vague, open-ended and not sufficiently tailored" to prove what has caused or will cause harm against New York residents, this latest delay doesn't necessarily mean that iFinex will have its appeal accepted.

A month later, on May 21, Bitfinex and Tether filed to have the case dismissed, arguing that the attorney general doesn't have jurisdiction over them since they "Do not allow New Yorkers on their platforms."

While Howlett himself doesn't say which side is likely to produce new evidence, the fact that the onus is on the attorney general to prove its case would indicate that Justice Cohen has granted an extension in the event that the OAG dredges up new, material evidence.

Negative impact on Tether and Bitfinex?Even though the indecision of Justice Cohen might imply that Bitfinex could eventually escape litigation, a long, protracted injunction could already be damaging enough as it is because the more Bitfinex and Tether have their names dragged through the mud, the more traders and customers will potentially be scared away from them.

On April 25 - the very day the attorney general announced its proceedings - Tether issued 300 million USDT. On June 11 and June 17, it printed a further 150 million and then 100 million USDT, while it has printed at least 450 million USDT since July 1.No doubt Bitfinex and Tether will claim that this busy period of issuance was part of an attempt to meet increased demand for liquidity in cryptocurrency markets.

Slipping through the net?The case against the attorney general may have been negatively affecting Bitfinex's business, but given the lack of transparency around Tether, it is hard to say for sure.

First of all, it's likely that the New York attorney general is struggling to obtain concrete, damning evidence against Bitfinex.

In addition to the evidence the OAG has already amassed related to Bitfinex opening accounts with New York-based platforms, reports emerged at the end of July that traders residing in the state have been able to register with Bitfinex simply by clicking a box that declared they aren't U.S. residents.

These facts lead us to believe that the attorney general isn't holding smoking gun evidence against Bitfinex, yet there remain legitimate suspicions that there's still a case against the exchange and its sister company Tether.

This is likely why Justice Cohen has granted the extension, but if the attorney general doesn't provide hard evidence in this case soon, it's possible that Bitfinex and Tether will slip through its net.

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