Investigation Against iFinex Extended for Another 90 Days
The latest court hearing failed to grant a stay on the New York Attorney General’s investigation, putting Bitfinex under scrutiny again.
The New York Attorney General will have three more months to explore the workings of Bitfinex, the iconic cryptocurrency exchange ran by the iFinex company. The latest court hearing on the case failed to grant a stay on the investigation and extended the process for another 90 days.
While cryptocurrency trading is unregulated, and there is no mention of perceived flaws such as deliberate bot trading, or the seemingly organized Tether (USDT)printing which impacted the price of Bitcoin (BTC). The chief concern of the NYAG was the fact that a large part of the Bitfinex activity was situated in New York, including usage of banking services, as well as serving local investors.
Bitfinex defended itself again, stating that the descriptions of New York-based activity were misleading and that the exchange did not break local regulations. Some of the entities based in New York also acquired USDT coins from other exchanges, where US regulations did not apply.
Bitfinex so far lacks BitLicense, the permission to operate in the state of New York, thus giving the chief legal basis for the accusations. These allegations may also allow the NYAG to delve deeper into Tether, Inc., the company. The accuser narrowed its case after failing in its demands to acquire more general documents about the activity of Tether and Bitfinex.
Following the news of the extended procedure, the price of BTC showed weakness, falling and hovering under $9,500 for a few hours. It is possible that the news of the ongoing investigation has added to the pessimism.
Paradoxically, negative news from Bitfinex in the past months have also preceded booms in BTC prices. Even the news that Bifinex lost access to $850 million due to the sanctions against Crypto Capital failed to topple the price, and instead triggered the biggest rally that took BTC to its yearly price record so far.
USDT is also extremely active in the crypto ecosystem, taking up as much as 30% of all trading activity. The stablecoin is used to fuel crypto-to-crypto exchanges, as well as to move funds worldwide and possibly to circumvent capital controls in some countries.