A Showdown in the Appellate Division
In an unexpected twist in the crypto world, New York Attorney General Letitia James has taken a firm stand against Bitfinex and Tether, boldly challenging their attempts to thwart her office’s probing investigation. Recently filed documents unveil her assertion that these companies are desperately trying to stall what could potentially become a significant securities and commodities fraud case.
High Stakes and High Claims
The heat intensified on December 4 (but only hit public ears on December 12) when AG James fired back at claims from Bitfinex and Tether’s legal team. They argue that since “tethers are not securities or commodities,” the NYAG lacks the authority to scrutinize them. Yet, as James highlights, this duo has already swung and missed—not once, but twice—at halting an investigation that was logically set into motion.
The Seven-Month Standoff
James’ document dryly notes the almost-eight-month delay since a court ordered Bitfinex and Tether to produce pertinent evidence regarding their operations. No show? No problem. Or at least, that’s the apparent mindset of these two crypto giants. The AG rebuffed their excuses, insisting, “No principle of law or rule of procedure allows a subject of an investigation to refuse to comply with that investigation in the face of a lawful court order.”
Document Trails and Lack of Transparency
In response, Bitfinex and Tether maintain they’ve provided over 70,000 pages of documents, arguing it’s not their fault AG James just can’t connect the dots. Their lawyers insisted that the real reason behind the NYAG’s roadblocks is simple: “evidence does not exist.” Now that’s a spicy allegation!
Investment Risks and Customer Awareness
The legal drama didn’t stop there. Oh no! In a curious argument, lawyers for Bitfinex and Tether contended that they are not obliged to inform customers about investment risks, as these customers are savvy enough to realize the inherent dangers of non-FDIC-backed investments. Long story short: if you decide to dive into the deep end of crypto without a life vest, it’s your problem, not theirs.
The Alleged Cover-Up in Question
The legal clash springs from allegations by AG James that Bitfinex, alongside its parent company iFinex and Tether Limited, engaged in dubious practices that could have defrauded New York investors. The accusation claims Bitfinex borrowed a jaw-dropping $850 million from Tether to cover undisclosed losses. Add to that a recent indictment linked to a shadow payment processor, and it’s evident that this convoluted web of digital dollars is only getting stickier.
