Bitfinex has claimed that the New York Attorney General’s office (OAG) don’t have jurisdiction over the exchange as it is a foreign entity and does not have customers or shareholders in the state, in the latest twist to the ongoing court case. They have also claimed that the OAG is making the New York connections closer than they actually are in order to falsely strengthen the case. The new filings are the latest attempt by iFinex, Bitfinex’s owner, to cancel, or at least modify, the preliminary injunction secured by the OAG at the end of April which requires Bitfinex and Tether to turn over all documents relating to a $625 million transfer and a $900 million credit line extended by Tether to Bitfinex.
OAG Trying to “Confuse Matters”
Central to its case is the OAG’s assertion that Bitfinex had operations in New York when it issued massive loans and credit in the form of USDT to a New York based trading firm. Bitfinex however argues said this is misleading, stating in the new filings that the borrower was in fact a foreign entity, putting the deal outside of the OAG’s jurisdiction. Bitfinex also claims that the OAG made similar misleading claims in the “Whitehurst Affirmation”, which featured a list of New York-based logins from a professional trading firm using Bitfinex. Bitfinex says that these logins are linked to a foreign company rather than a New York-based one, accusing the OAG of trying to “confuse matters by referring to isolated instances where Respondents’ foreign customers have shareholders or other personnel in New York.” The OAG is also, according to Bitfinex, making misleading statements as to who the customer actually is.
Bitfinex Claims USDT Tokens Don’t Count
The OAG’s fight to get its hands on the paperwork surrounding the Bitfinex/Tether loans falls under the Martin Act which governs the reach of the OAG in securities fraud cases. Bitfinex claims that USDT are securities nor commodities and so do not fall under the Martin Act, which once again highlights the wooly regulations surrounding cryptocurrencies. A defeat for the OAG in this case however might just push the classification of cryptocurrencies up the legislative agenda, unless Kik can get their first in their battle with the Securities and Exchange Commission.