HomeLatest NewsNew York AG asks Bitfinex and Tether to stop further delays

New York AG asks Bitfinex and Tether to stop further delays

September 15, 2020 By Sam Grant

The New York Attorney General’s office has grown tired of the delays around compliance to a 17-month-old document production order by Bitfinex and Tether

Ahead of a meeting between the regulator and the two crypto companies, John Castiglione, NYAG senior counsel, filed a letter asking the two firms to comply with the Order detailing financial information within the next 60 days.

“As of this filing, the 354 Order has been in place for seventeen months. In that time, Respondents have produced ‘jurisdictional’ documents (as directed by this Court) but failed to produce the core information called for in the Order. The delays must stop, and Respondents should be directed to comply promptly,” Castiglione revealed.

The counsel from the other side, however, argued that  the Order was too broad, and for progress to be made, the scope had to be narrowed down.

This case between the regulator and the two firms (Bitfinex and Tether) has indeed been a lengthy one. It started in April last year after the AG’s office claimed that Bitfinex had lost access to almost $1 billion in customer funds.

Joel Cohen, New York State Supreme Court Justice, scheduled the hearing between the two sides for Thursday 17. This follows hard on the heels of the NYAG’s office sending a request last week in which the office complained that neither Bitfinex nor Tether had submitted any documents.

Castiglione asserts that the NYAG is requesting all the relevant documents to be submitted within two months. The NYAG office is also looking to extend an injunction barring Tether from loaning funds to Bitfinex by three months.

Charles Michael, the attorney representing Bitfinex, disagreed with the extension of the injunction in a letter.

“The allegedly concealed facts have been out in the open for 17 months, during which consumers have been free to redeem their tethers without restriction. Instead, they have chosen to buy, with tethers’ market cap growing six-fold (to over $14 billion).”

According to Michael, the growth in Tether’s market cap shows market confidence in the dollar-pegged crypto. This negates the justification for the injunction being extended.

“Consumers are well protected today, and do not need OAG’s injunction. The loan transaction supposedly impairing tethers’ reserves was over 25% of tethers’ backing at the time of the injunction, but, thanks to Bitfinex’s repayments and tethers’ growth, the balance now is less than 4% of tethers’ backing,” Michael noted in his letter.

The attorney also added that the value of Tether’s assets eclipsed the amount of USDT issued by $160 million.