The Ongoing Legal Tug-of-War

In a high-stakes legal battle, Bitfinex and Tether are fighting back against allegations posed by the New York Attorney General (NYAG). On July 22, the teams of lawyers from these cryptocurrency giants filed multiple documents asserting that neither company has ever served customers residing in the Empire State. This is less a straightforward court case and more of a dramatic courtroom saga, filled with legal jargon and intrigue!

Terms of Service: A Shield for Foreign Entities

One notable document featured an argument from attorney Stuart Hoegner, who pointed to the provisions in Bitfinex’s terms of service. According to Hoegner, the companies only engage with foreign entities that meet their definition of Eligible Contract Participants (ECPs). He boldly stated:

“Under Bitfinex’s and Tether’s Terms of Service, Eligible Contract Participants (‘ECPs’) that transact with Bitfinex or Tether must be foreign entities.”

Essentially, they’re saying, “Hey, if you’re not from around here, don’t bother us!” While some would-be customers may have American ties, the companies insist they only do business with entities outside the U.S.

A Legal Labyrinth of Jurisdiction

The law firms involved, Steptoe & Johnson LLP and Morgan, Lewis & Bockius LLP, brought forth their own defenses, arguing that the NYAG has failed to prove any intentional business engagements with New York. They argue that referencing instances with foreign customers is merely a distraction:

“OAG tries to confuse matters by referring to isolated instances where Respondents’ foreign customers have shareholders or other personnel in New York.”

This leads to the question – what does “purposefully directed” even mean in the digital age? For most cryptocurrency operations, “location” can be as flexible as an acrobat in a circus!

Are New Yorkers Really Harmed?

Bitfinex and Tether do not stop at just the jurisdictional arguments; they also claim that even if the AG proves they served New York residents, there’s still no concrete evidence of actual harm. They describe the NYAG’s documents as a jumble:

“a grab bag of miscellaneous and unrelated New York contacts.”

In simpler terms, they’re calling out what they see as a lack of coherent proof. The companies insist that, despite extensive discovery, no evidence indicates any New Yorkers fell victim to deception or misled by claims, particularly regarding Tether’s backing.

Whisking Away Bank Relationships

Previously reported news suggested that the Metropolitan Commercial Bank, headquartered in New York, shut accounts associated with Tether due to minimal activity. It seems even banks don’t want to get caught in this whirlwind!

The bank’s spokesperson stated, “Tether only held its accounts for five months, and we saw negligible activity during this period.”

Talk about a speedy breakup! Seems like Tether had a brief fling with the bank but didn’t make it past the “getting to know you” stage.

Conclusion: What’s Next in the Crypto Courtroom?

The legal back-and-forth between Bitfinex, Tether, and the NYAG continues to develop like an ongoing soap opera, where the plot twists keep getting more intricate. With so much at stake, the world watches closely to see how this case unfolds – will the truth be revealed or is it all just a great crypto charade? Stay tuned!