The case of the Attorney General of New York, Letitia James, against the company that owns Bitfinex and Tether, iFinex, moves forward.
Begun in 2019, when the Attorney General accused the company of using Tether’s funds to cover a hole in the exchange’s finances, yesterday the first department of the New York State Supreme Court’s Appeals Division ruled in favour of Letitia James, and against iFinex.
In reality, this ruling would only concern an apparently marginal technical issue, but it has the potential to put iFinex in trouble.
Since the accusation involves the use of stablecoin funds to cover the $850 million losses resulting from the freezing of Crypto Capital’s funds in 2018, the company was ordered to submit all relevant documentation to prove or disprove the defendants’ claim that this never happened.
The Supreme Court yesterday ruled that this documentation must be provided.
In fact, the company had filed a motion that it should not be held liable before the court in New York, since it is not based and does not provide services in the State of New York, and thus requested that the investigation of Letitia James be closed. The Supreme Court rejected this motion, effectively giving the Attorney General the green light.
iFinex will now be required to comply with the Attorney General’s request to submit all documentation supporting the operations carried out in 2018 to address the $850 million hole generated by the seizure of Crypto Capital Corp funds.
It should be noted that the hole was then completely covered in May 2019 with the collection of $1 billion through the issuance of the LEO token, the price of which has increased by about 16% since then.
This, however, would not cancel the possible wrongdoings made in 2018, and in particular, the cover-up hypothesis on which the investigations of Letitia James are focusing.
This lawsuit had a very fast start, but then seemed to have stalled mainly due to some legal victories by iFinex.
The current ruling of the Supreme Court of the State of New York effectively reopens it, thereby allowing a possible speeding up of the investigation. It should be added that the US presidential elections will be held in November, and Letitia James is an active member of the Democratic Party with the ambition to run for mayor of New York in 2021.
However, it is not certain whether James will use this opportunity for propaganda purposes, and the ongoing coronavirus pandemic in the US could actually delay the investigation.