Embattled cryptocurrency exchange Bitfinex together with closely affiliated company and stablecoin issuer Tether have been granted a stay of demands against the New York Attorney General by the New York Supreme Court (NYSC). This ruling was in response to a motion filed by the two companies seeking to stop investigations into the dealings of the two companies and their parent company iFinex over the alleged loss of close to $1 billion. According to Letitia James, the New York Attorney General (NYAG), the two companies conspired to hide a loss of $850 million that could have defrauded New York investors.
Their initial motion was seeking a complete dismissal of the case against them but instead Hon. Joel M. Cohen of the New York Supreme Court granted them a partial stay of documents demanded by the NYAG. According to the Wednesday ruling, both Bitfinex and Tether will be required to provide documents related to their activities in the state of New York. This follows the two companies’ claim that they do not serve the residents of New York.
In addition, the two companies filed a motion citing the state’s Martin Act of Securities Fraud. The ACT would effectively give more powers to the AG in executing the case if she would successfully classify the case as fraud against investors. However, the two companies are choosing to defend themselves on the matter of jurisdiction stating that they are foreign companies and that the requested documents are stored overseas.
Justice Cohen pushed the motion hearing till July 29th this year according to a press release shared by both companies yesterday. In the press release, they termed the ruling as a “victory” against the NYAG in their ongoing defense.
“We look forward to continuing to challenge the New York Attorney General’s unmeritorious claims, and we will continue to vigorously protect our customers and assert our rights against those making false and unsupported claims against us.”