New York law is not in favor of BitFinex and iFinex

The Court of Appeal ruled that BitFinex should not make available any documents regarding Tether’s money transfers. The decision overturns the order issued by the first court, which asked iFinex to provide information relevant to the investigation to the New York Public Prosecutor’s Office (NYAG).

In August, iFinex appealed against this decision, which was granted yesterday.
The Court of Appeal also imposed a deadline of November 4 for the New York prosecutor’s office to appeal this decision.

iFinex was accused of covering a $ 850 million loss of the Bitfinex exchange using funds that supported Tether’s stable cryptocurrency (USDT). The main problem with borrowed funds is that Tether’s cash reserves were used as a basis for issuing USDT. If Tether users wanted to cash in, they couldn’t do it at the time.

They broke New York law

The companies were accused of violating New York law and Bitfinex did not inform investors about the losses.

Ifinex, the parent company of Bitfinex, argued that the New York prosecutor’s office has no jurisdiction over the case because the exchange has no clients in this state. It has also delayed the decision on the documents to be provided by September. Meanwhile, the exchange was functioning normally, and Tether adjusted his statements that USDT is 100% based on US dollar deposits.

Apparently, the NYAG-Bitfinex case is likely to end on November 4, if the prosecution will not provide sufficient arguments for further investigations.