The New York Attorney General’s Office (NYAG) has submitted new
evidence in its aim to prove that crypto exchange Bitfinex and Tether
had served New York customers longer than they claimed.
As part of the NYAG’s ongoing investigation into Bitfinex and Tether, the NYAG filed
a Memorandum of Law in Opposition, an affirmation, as well as a total
of 28 pieces of exhibits on July 8, with the New York Supreme Court.
The NYAG said in the new documents:
“Even a cursory examination of the facts gathered to date
in the OAG’ s investigation shows that Respondents have extensive and
consistent contacts to New York concerning the matters under
investigation.”
The filings come with various exhibits to showcase Bitfinex’s and
Tether’s interactions with New York residents over a period that was
longer than the two previously claimed.
CoinDesk reported
in May that Bitfinex and Tether argued with the judge in the New York
Supreme Court that the case should be dismissed since they “have nothing
to do with New York investors” and “the businesses do not allow New
Yorkers on their platforms and do not advertise or otherwise do business
here.”
However, the NYAG indicated that based on the series of evidence gathered and provided to the court, Bitfnex had customers log in to its platform as recently as Dec. 18, 2018.
Further, Exhibit (S) – H
also showed the correspondence between Bitfnex and the billionaire
hedge fund manager Michael Novogratz’s Galaxy Digital to onboard the
latter as Bitfinex’s customer in October 2018.
In addition, the NYAG provided exhibits to show that Bitfinex held
accounts with two New York banks – Signature Bank and Noble Bank – and
at least “one other New York-based financial institution during the
relevant time period, which they used to transfer money to and from
clients of the Bitfinex and Tether platforms.”
The NYAG added:
“Respondents have repeatedly engaged New York firms to
assist them in their business objectives, including to make statements
to the markets about the operation of the Bitfinex trading platform and
the cash backing of tethers; and as recently as 2019, Respondents opened
a trading account with at least one New York-based virtual currency
firm.”
In the Memorandum of Law in Opposition, the NYAG also took aim at Bitfinex’s recent issuance of the LEO exchange platform token.
“Respondents’ recent ‘initial exchange offering,’ for instance, has
every indicia of a securities issuance subject to the Martin Act, and
there is reason to believe that the issuance is related to the matters
under investigation,” the NYAG said.
The NYAG first filed a complaint against Bitfinex
and Tether in April 2019, alleging that Bitfinex had covered up the
loss of more than $850 million by borrowing from Tether’s reserves.
Shortly after the NYAG filed the complaint, Bitfinex conducted an
initial exchange offering for its own LEO token and one shareholder of
the firm claimed it successfully raised $1 billion with commitment from private investors.
Read the full affirmation below:
