TL;DR: Embattled cryptocurrency exchange Bitfinex and stablecoin company Tether (USDT) released a joint statement claiming victory after New York state Supreme Court Judge Joel Cohen agreed to modify an injunction brought against both by the state’s Attorney General recently.
Tether, Bitfinex Claim Momentary Legal Victory
Insisting Judge Cohen “granted our motion to modify the injunction obtained by the New York Attorney General against our business because the original injunction was vague, overbroad, and not time-limited,” both Tether and Bitfinex released the same statement on their respective websites.
They claim the new order allows them “to continue their normal business activities. It also stipulates that the injunction will expire in 90 days and that the burden to seek any renewal from the court rests squarely on the shoulders of the New York Attorney General’s office, where it belongs. Judge Cohen held that New York’s Martin Act ‘does not provide a roving mandate to regulate commercial activity,'” something both have accused the law enforcement agency of doing.
Calling it a “victory,” the statement further characterized the Judge’s comments as insisting the Attorney General’s original request to investigate was “both amorphous and endless,” and therefore should be narrowed. What it boils down to for Tether and Bitfinex is essentially being allowed “to run their businesses in the ordinary course, even during the short period when this now narrowed preliminary injunction is in place.” Referring to the investigation as proceeding in “bad faith,” they vowed to “vigorously defend against any action by the New York Attorney General’s office.”
The Judge did find “that the preliminary injunction should be tailored to address OAG’s legitimate law enforcement concerns while not unnecessarily interfering with Respondents’ legitimate business activities,” and yet also demanded Tether cease in anymore loans to Bitfinex, not distribute reserve funds beyond payroll and regular remuneration, and to keep documents requested by the Attorney General free from tamper. Tether’s assets remain frozen, and Bitfinex is under investigation for not having $800 million customer funds it claims are with processor Crypto Capital.
DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.
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