New York Supreme Court Judge Joel Cohen has allowed cryptocurrency exchange Bitfinex’s motion to change an injunction from the NYAG (New York Attorney General). The exchange made this announcement on May 16.
Bitfinex and Tether Can Continue to Trade
According to Bitfinex’s announcement, the Supreme Court order will let Bitfinex and Tether, its affiliate and stablecoin operator, continue their normal business. The announcement also explained that the original injunction issued by the NYAG would expire in the next 90 days and that any motion to renew that would be the NYAG’s responsibility.
In his decision, Judge Cohen stated the original injunction issued by the NYAG needed to be tailored to address the OAG’s (Office of the Attorney General) valid law enforcement concerns, but did not necessarily have to interfere with the Respondents’ (Bitfinex and Tether) legitimate business activities.
The entire issue began with the NYAG alleging that Bitfinex had lost $850 million, and had used funds from Tether in order to secretly cover up the shortfall. The cryptocurrency exchange stated that these allegations had false assertions and were filled with inaccuracies.
The exchange also stated that the NYAG had acted in bad faith and that it had ignored Bitfinex’s historical as well as voluntary cooperation with them.
Orders Upheld by the Supreme Court
Prior to the New York Supreme Court allowing a modification to the injunction, a New York District Court Judge had ordered Bitfinex and Tether to submit documentation about the line of credit and loan that the stablecoin operator that provided the cryptocurrency exchange.
The court also issued a list of stipulations that were a part of the NYAG’s ongoing investigation into the two companies’ dealings with regard to the $850 million fund transfer.
Judge Cohen upheld these orders, however, stated that Tether could still invest its reserves in Bitfinex as a part of normal operations.
The stipulations were that Tether could no longer loan any assets to Bitfinex or other entities, except as a part of the normal course of business. Additionally, Tether could not distribute its reserve funds to employees, executives or other individuals, except as salaries or for normal contractor, vendor or consultant payments. The third stipulation was that neither of the two companies could modify documents the NYAG had initially asked for when it started its investigation in any manner.
Bitfinex, in its announcement, lauded the Supreme Court Judge’s decision, stating that the ruling left no doubt that both the exchange and Tether were entitled to run their businesses in the normal course.