New York Attorney General Hits Back at Bitfinex, Tether

A long-running battle between the New York Attorney General (AG) and exchange platform Bitfinex has taken a fresh turn. The AG claims there have been irregularities with Bitfinex claims about whether – and how long – the platform and related companies have been dealing with New York-based customers.

The AG’s initial motion against Bitfinex (and the stablecoin Tether, controlled by the same owners) claimed that the company “mismanaged” customer funds and “helped itself” to cash reserves that were supposed to back Tether. The AG also said the exchange had attempted to “cover up” what it had done.

Bitfinex responded with legal measures of its own, leading to a second AG memorandum of law in May. The exchange also stated that it does not “let New Yorkers on [its] platforms […] or otherwise do business in the state.”

However, the AG has now filed a further memorandum to the New York Supreme Court, affirming its previous motions, along with of 28 exhibits on July 8, which it says supports its claims that Bitfinex-related matters are indeed within the New York AG’s jurisdiction.

Per the AG’s filing, the evidence shows that Bitfinex and Tether have “extensive and consistent contacts to New York concerning the matters under investigation.”

The AG says its evidence proves Bitfinex had dealings with three New York-based financial institutions, including Signature Bank and Noble Bank. The AG also submitted evidence it says proves that Michael Novogratz’s Galaxy Digital firm was admitted as a Bitfinex customer as recently as October last year.

The AG also took aim at the preliminary Bitfinex injunction, calling it “troubling in several respects” – slating it for being “vague,” “overbroad” and stating that it fails to meet the purposes of a typical preliminary injunction.

The AG states that its evidence should convince the court to uphold its initial motion against Bitfinex and its operator iFinex.
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iFinex’s recently launched native token, LEO, that reached a USD 1.5 billion market capitalization in under two weeks, is down by almost 7% in the past 24 hours (05:49 UTC).

Bitfinex is yet to respond to the claims made by the AG.