Judge Postpones Decision on NYAG Case Against Bitfinex and Tether
New York Supreme Court Judge Joel M. Cohen has postponed issuing a decision on whether the Office of the New York Attorney General’s case against Bitfinex and Tether will stand.
Judge Cohen Requests More Time
As previously reported by Bitcoinist, Bitfinex and the New York Attorney General’s office has been enmeshed in a lengthy legal dispute over allegations that Bitfinex illegally conducted business activities in the state of New York. The matter was meant to move another step closer to resolution as both parties met before the New York Supreme Court today.
Rather than issue a decision, Judge Joel M. Cohen chose to delay making a decision, citing the need for more time to review the case. The NYAG had requested that Bitfinex and USDT stablecoin issuer Tether hand over documents pertaining to an alleged $850 million loan the exchange borrowed from Tether reserves to cover client losses.
The NYAG also alleges that Bitfinex violated the law by knowingly allowing users residing in the US to trade on its platform.
Bitfinex Plagued by Scandals
Last Friday, in somewhat of a blockbuster reveal, Bitfinex admitted that a U.S.-based customer had successfully found a workaround to the Bitfinex’s restrictions to trade on the platform. A statement from Bitfinex’s website explained that:
We have now identified this user. We correctly flagged this user’s IP address as being in the U.S. Notwithstanding the U.S. IP address — which may be used by Bitfinex customers, as appropriate — our system logs demonstrate that this user represented to us several times that he was not an individual resident in the U.S. This person has lied to Bitfinex on multiple occasions, deliberately and wrongly concealed his location, and flagrantly violated our terms of service.
Bitfinex and Tether are calling for a motion to dismiss the case and the NYAG is seeking for the release of documents they claim are crucial to understanding exactly how and for what purpose the $850 million loan was issued.
Judge Cohen’s delay in issuing a final decision is likely to extend the current preliminary injunction by another 90 days. Cohen said, “I will extend the injunction…if I dismiss the case then obviously the injunction goes with it.
If I don’t dismiss the case the injunction will be extended.” Cohen further clarified that “the idea is to keep things where they are until the decision of this motion, so the decision is to extend the stay and…extend the injunction.”
As things currently stand, Tether and Bitfinex are free to continue normal operations, with the exception being, Tether cannot lend additional funds to Bitfinex.
Tether Keeps it Moving
Generally, Tether appears unconcerned about the kerfuffle with the NYAG and on Monday the company announced that its USDT stablecoin had launched on Blockstream’s Liquid Network sidechain.
Liquid functions as an additional layer to Bitcoin’s blockchain and facilitates the speedy transaction of large volumes. Tether’s launch on liquid means users can now make atomic swaps between Liquid BTC and Liquid USDT.
According to Blockstream, atomic swaps ease and secure over-the-counter (OTC) trades. Liquid’s lightning-quick block times will also assist traders looking to quickly make transfers between exchanges and exploit arbitrage opportunities.
Do you think the delay on the case will give Bitcoin room to rally? Share your thoughts in the comments below!
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