Bitfinex & iFinex Case Extended By New York Judge

Bitfinex & iFinex Case Extended By New York Judge

Justice Joel M. Cohen of the New York Supreme Court (NYSC) has ruled to extend the preliminary injunction in the ongoing case of crypto exchange Bitfinex and Tether’s parent firm, iFinex against the New York Attorney General (NNYAG) on July 29th.

According to reports, Cohen has decided to give a 90-day extension to the case which allegedly means that OAG will be able to continue their investigation. Lawyers of Tether tried to appeal to dismiss the motion immediately but Cohen initially denied their appeal.

Speaking to the court, iFinex has argued that the court doesn't have the subject matter jurisdiction because Tether is not security nor commodity as there is no futures market. The firm’s defence went onto stress that Tether and Bitfinex are two different businesses with two completely different business ideas. 

Back to the start

Flashback to April when the NYAG Letitia James revealed that her office obtained a court filing alleging that iFinex Inc. and their associated bodies were in violation of New York law in regards to activities that could have defrauded New York-based crypto investors.

As reported by CoinTelegraph:

“Bitfinex allegedly lost $850 million in client and corporate funds, and then attempted to cover up this loss by secretly helping itself to around $900 million of Tether's cash reserves. iFinex subsequently responded that the OAG's claims were "riddled with false assertions" and that the lost $850 million is being safeguarded.”

iFinex has further applied to have the case dismissed and has argued that the OAG has no legal basis to sue it under the fact that Bitfinex wasn’t actually operating any operations in New York during the period in issue. That being said, in early July, news broke that the New York-based Metropolitan Commercial Bank closed off a New York-based bank account in suggesting that both the leading stable in and the exchange could have been operating in the city.

After the fillings by both parties lawyers on 22nd July, the attorneys argued that even if the NYAG found success in showing that the firms had operated with New York’s residents, they haven’t established that the investors were affected by the companies’ activities. Both representatives of the two sides have stated:

“For purposes of personal jurisdiction, OAG cannot show Respondents engaged in any business activity purposefully directed at New York. OAG tries to confuse matters by referring to isolated instances where Respondents’ foreign customers have shareholders or other personnel in New York. But in those circumstances, Respondents’ counterparties — the ones with which Respondents actually transacted business — are the foreign entities.”

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