NYAG Allowed to Continue Investigation Against Tether, iFinex

A New York Supreme Court decision has denied a stay on the procedure against Tether, Inc. and iFinex.

The New York Attorney General received a green light to continue the investigation against Tether, Inc. and iFinex, the parent company of the Bitfinex exchange. A New York Supreme Court decision established that the companies fell under the jurisdiction of the state of New York, despite the denials of the defendants.

The new decision extends the NYAG procedure and allows the prosecutor to require documents and data to gain a clearer picture of the activity of the two companies. The court upheld its decision to limit the scope of the investigation, preventing a very broad exploration of the companies’ operations. But the stay on demanding new documents has been lifted, and the NYAG will demand new evidence of illegal action in New York.

The NYAG will not investigate the nature of USDT printing, and the matter of Tether’s solvency remains open.

So far, the NYAG focuses on the activity of the companies within the state of New York in the past few years. Despite the limitation to offer crypto-assets to residents from the state, Bitfinex and Tether reportedly sold the USDT stablecoin to local entities and allowed usage of the exchange.

Tether and iFinex responded with a note disputing the court’s jurisdiction on the case and once again demanding a stay on the NYAG investigation. The companies claim they had no special intent to target residents of New York, as they performed international operations.

The NYAG investigation was triggered after news of Bitfinex losing access to $850 million due to international investigations against CryptoCapital. Afterward, Tether revealed it had used some of its funds to support Bitfinex, while leaving USDT coins with only 74% fiat backing.

Currently, there are more than 4.042 billion USDT in circulation, securing the larger part of liquidity on international crypto markets. USDT makes up nearly 70% of all Bitcoin (BTC) trading volumes, and props up Asian exchanges to boost their activity in 2019. The high importance of Tether within the crypto ecosystem attracts special attention to the company’s solvency, as a USDT crash would wipe out most of the value across all markets.

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