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Bitcoin Exchange Must Give US Documents As Lawsuit Grinds On

Anja van Oosterhout | Aug 20, 2019 | 06:00

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Bitcoin exchange Bitfinex must provide documents to US authorities after a New York judge ruled against its request to dismiss a lawsuit against it.

Judge U-Turns On Bitcoin Exchange Protection

According to a filing dated August 19, the Supreme Court of the State of New York moved against Bitfinex and its sister company, stablecoin issuer Tether.

A battle had ensued regarding the court’s jurisdiction over the case, which focuses on accusations by the New York Attorney General (NYAG) Bitfinex engaged in embezzlement of funds worth $850 million.

“The Court disagrees with (the NYAG) that it is (or can be) premature for the Court to determine whether it has jurisdiction to issue orders impacting the rights of Respondents in this proceeding,” the filing reads. 

That said, the Court finds based on the evidence and applicable law that it has jurisdiction – and a clear statutory mandate – to adjudicate this matter. Accordingly, (Bitfinex and Tether’s) motion is denied, and the temporary stay of the investigation is dissolved.

As result of the ruling, both companies much supply the NYAG with whatever documentation it requires for its investigation into what happened to the cash.

October Deadline Already Looms

As Bitcoinist reported, the debacle began in August last year after $850 million was sent to a third party and became unintentionally quarantined. Later, Bitfinex admitted it did not have personal control over the funds, with a chain of participants and suspicion subsequently opening up as attention increased.

The bitcoin exchange however held its ground in court, arguing the NYAG’s approach was overly broad and unsuitable. 

The same judge granted a moratorium on document demands in May, something officials at the time greeted with open arms.

“We look forward to continuing to challenge the New York Attorney General’s unmeritorious (sic) claims, and we will continue to vigorously protect our customers and assert our rights against those making false and unsupported claims against us,” a statement read.

Bitfinex must now provide paperwork by October 14, with the content of the moratorium order otherwise remaining unchanged. 

“…[A]lthough this case presents complex legal questions, the Court does not believe that is enough to warrant staying this case and further delaying or otherwise interfering with (the NYAG’s) investigation,” the filing summarizes.

Bitfinex currently faces multiple battles. Last week saw stolen funds from a hack in 2016 suddenly begin to move again after a three-year dormant period. Mystery still surrounds the theft, which occurred in August that year and involved over 119,000 BTC (now worth $1.3 billion).

What do you think about the Bitfinex lawsuit? Let us know in the comments below!

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