Bitfinex: NY Attorney General Misled the Court in Recent Filings

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iFinex and The Office of New York’s Attorney General are locked in what could be tagged as a high-profile legal dispute, and no party seems to be backing down.

On Monday, lawyers representing Tether and Bitfinex (both housed under iFinex and directly involved in the case) submitted several filings in a bid to assert their point that they never served New York-based customers.


In the filings, the attorneys claimed that the ONYAG misled the court in previous submissions, deliberately making the companies connection within the state look stronger than they are.

The filings are all a part of Bitfinex’s attempts to get the case dismissed entirely. Since the Martin Act, a securities law in New York, forbids the ONYAG from prosecuting fraud cases outside New York State, Bitfinex is on a mission to prove that the Office is indeed out of its jurisdiction.

Foreign Entities not New York-based Firms

In one of the filings, the ONYAG had claimed that Bitfinex was operating in New York when it granted Tether (USDT)-based loans to a trading firm in the state. The NYAG also noted that the exchange also opened an account with another firm to facilitate the transaction.

Summarily, the exchange revealed that they transacted with foreign entities that don’t have operations in New York.

It added that the summation of the ONYAG’s documents detailing their customers was related to “Eligible Contract Participants (ECPs).” To further clarify, Bitfinex’s attorneys explained that according to the company’s terms of service, all ECPs that conduct transactions with the exchange are required to be foreign entities.

“Although those foreign entities may have shareholders or personnel who reside in, or otherwise have contact with, the United States or New York, Bitfinex’s and Tether’s customers are the foreign entities themselves,” the exchange explained.

In addition to that, it was revealed that the elephant in the room- the allegedly embezzled funds which led to the line of credit from Tether to Bitfinex- also took place outside New York. At the time, any claims of Tether being fully backed were made by an entity outside the state as well.

Again, Bitfinex and its lawyers questioned why the ONYAG would get involved in something that was out of its jurisdiction. A smart nudge to its option to dismiss the case.

Does the NYAG have Evidence?

In a separate filing, the exchange’s attorneys claimed that the ONYAG was unable to show that Bitfinex had any business dealings in New York.

It added that even if the legal authority could show that it had served New York residents, they hadn’t established that any of the company’s activities had affected investors in any way.

In part, the filing reads, “AG has failed to identify a single New York customer who was misled or even considered representations about tether’s backing, nor any New Yorker harmed.”

There is no doubt that the ONYAG will find a way to challenge this claim, as it has always done. In what has pretty much become the crypto industry’s most dragged out legal battle of the year, all eyes will be on both entities and who does come out on top when it’s all said and done.


Based in the UK, Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system. Follow him on Twitter: @adejimi or Contact

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