The popular digital currency trading platform, Bitfinex must deal with the New York Office of the Attorney General (NYAG) over the
alleged hiding of over $800 million in client and corporate funds. The
NY state Supreme Court’s Appellate Division overruled an appeal on
Thursday, after the company put forth the argument that tether (USDT) was not a security or traditional commodity.
Last year in April, New York prosecutors alleged that Bitfinex lost
$850 million of co-mingled customer and corporate funds. The charges
stemmed from accusations coming from the NYAG and New York Attorney
General Letitia James.
Recently the case was heard by the NY State Supreme Court’s Appellate Division, and the company attempted to claim that tether (USDT)
was not a type of commodity or security. Basically, if tether wasn’t a
commodity or security, then the court and the NYAG would have zero
jurisdiction over the companies involved.
Additionally, Bitfinex
attempted to argue that because the company was not a U.S.-based firm,
NY jurisdiction would also not apply. Essentially, when news.Bitcoin.com
reported
on the subject in May 2019, the NYAG demanded that Bitfinex must show
transparency by turning over documents tied to the firm Tether.
With
the jurisdiction arguments used in the appeals court, Bitfinex claimed
that the NY officials had no authority over documents. However, since
the appeals court rejected the claims that argued against jurisdiction,
Bitfinex must now answer to the allegations stemming from New York
State.
“The trial court properly rejected the attempts by
respondents to limit petitioner’s lawful authority to protect New York
residents,” the latest ruling notes.
In an email
to the financial columnist, Jaspreet Kalra, Bitfinex’s General Counsel
Stuart Hoegner said: “We will respect the court’s order. We have no
further comment on this matter at this time.”
New
York Attorney General Letitia James was thrilled with the decision
against Bitfinex. “Today’s decision validates our office’s ability to
use its broad and comprehensive investigative powers to protect New
Yorkers,” James told the press this week.
“Not even virtual
currencies are above the law. We are pleased with the court’s decision,
and will continue to protect the interest of investors in the
marketplace,” she added. Bitfinex, the parent company Ifinex, and Tether
Limited are also involved in another ongoing lawsuit as well.
source link : https://news.bitcoin.com/bitfinex-must-face-new-yorks-accusations-over-the-loss-of-850m-in-co-mingled-funds/
