Bitfinex and Tether ask the New York court for 30 more days to submit documents

Parent company iFinex says it needs more time to gather the documents requested by prosecutors

Bitfinex, Tether, OAG                                 

iFinex Inc, the parent company of crypto exchange Bitfinex and the issuer of stablecoin Tether (USDT), has asked the New York Supreme Court to postpone its upcoming trial date for a further month.

In a letter sent to the New York attorney general (OAG) on January 19, the company said it already had a large number of the documents requested by the prosecutors. However, it says it would take "a few more weeks" to submit the remainder.

It said:

"The defendants have largely completed production of the documents and produced a substantial volume of prosecution material (OAG) in recent weeks, although there are still additional agreed items that need to be completed. The parties will need a few more weeks: i) to produce the additional information, ii) for the OAG to review the production, and iii) to further discuss whether any additional procedures may be necessary."

The document submission process should have been completed by January 15, a date that is also an extension of the original deadline (December 16). According to the company’s lawyer, Charles Michael, a “substantial volume” of documents have already been filed with the New York attorney-general, but that there remained “supplemental agreed-upon items” that still had to be obtained.

In April 2019, the attorney-general of New York alleged that Bitfinex had covered up the loss of $850m in client funds and took out a loan from Tether's reserves. The company refuted these claims. Tether's lawyer Stuart Högner said at the time that the stablecoin USDT as of April 30, 2019, was backed by about 74 per cent of reserves. However, the prosecutor's investigation did not stop the issuance of Tether the stablecoin with a capitalisation of $24bn is still one of the largest crypto assets on the market.

In September 2020, the court ordered Bitfinex and Tether to transfer financial statements to the prosecutor's office and extended the ban on the transfer of funds.

Paolo Ardoino, CTO of Bitfinex and Tether, previously noted on Twitter that Tether is registered and regulated by the US Financial Crimes Enforcement Network (FinCEN), and any suggestion that USDT is not regulated should be considered FUD.

Given Tether's value in the industry, observers fear chaos in the cryptocurrency market and a collapse in cryptocurrency prices if iFinex is condemned.

 

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