Crypto Exchange Blocked From Tether Reserves During Lawsuit
(Bloomberg) -- Digital-asset exchange Bitfinex remains blocked from taking money from the cash reserves of the cryptocurrency Tether as a judge decides whether to dismiss a regulator’s lawsuit claiming the companies hid losses of more than $850 million.
New York Attorney General Letitia James sued the companies in April, saying executives cooked up a series of “conflicted corporate transactions” in which Bitfinex gave itself access to as much as $900 million of Tether’s cash reserves, which Tether repeatedly told investors fully backed its coin.
On Monday, New York State Supreme Court Justice Joel Cohen extended an injunction he issued in April blocking Bitfinex from accessing, loaning or making any claim on Tether’s cash reserves pending James’ investigation while he consider a bid to dismiss the case.
Hong Kong-based Ifinex Inc., the company that controls Bitfinex and Tether, has asked Cohen to throw out the suit, saying that New York has no jurisdiction in this matter, as U.S. residents aren’t allowed to trade on the exchange, which is registered in the British Virgin Islands. The litigation has impacted the affiliated companies’ ability to freely used their funds.
The case is In The Matter Of The Inquiry By Letitia James, Attorney General of the State of New York v Ifinex Inc., 450545/2019, New York State Supreme Court, New York County.
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