NYAG Hurting Bitfinex Customers, Crypto Market
The crypto space is packed with allegations aimed at Bitfinex. Apparently, the attorneys of the exchange claimed that these allegations are somehow affecting the customers of the company, especially if they are unable to access a line of credit from stablecoin issuer called Tether. Here is everything about it in a nutshell.
The Need to Modify or Cancel
According to a new filing, the attorneys of the exchange reportedly outlined a handful of arguments suggesting why there is a need for the preliminary injunction to be either modified or canceled. Basically, this preliminary injunction is being secured by the New York Attorney General, which was submitted at the end of last month.
As far as the balance of equities is concerned, the attorneys are confident that it strongly favors both Bitfinex and Tether. For them, the preliminary injunction is not necessarily about protecting an individual. It is rather about causing a great disruption to both the company and the stablecoin issuer. Ultimately, this would lead to the detriment of participants in the market.
Since the aforementioned injunction was filed, the exchange’s customers have decided to withdraw at least 30,000 BTC and 1 million ETH. The decision to do only indicates that it brought a significant impact on the company. Add to this the fact that the market capitalization, according to the filing, had already witnessed a loss of at least $10 billion – this concerns dozens of digital currencies and affected them within an hour following the filing of the injunction.
The Role of the Injunction
Basically, the preliminary injunction is requiring the exchange and the stable coin issuer to turn over all documents relating to the alleged $625 million transfer. It also covers the $900 million line of credit Tether is believed to have provided to the exchange after it latter lost its access to the $850 million, an amount which was being held by its supposed payment processor called Crypto Capital.
Moreover, the injunction is preventing the company from further drawing on the line of credit from Tether. It is worth noting that before the injunction was filed, the exchange was successful in drawing at least $700 million from the latter. Because of this narrative, the New York Attorney General decided to file the preliminary injunction as quickly as possible. The attorneys of the exchange also went to suggest that injunction, contrary to what the NYAG says, is broader.