BitFinex And Tether Receive Temporary Stay In $900 Million Case

US Justice Department Goes after Bitfinex’s Payment Processor

Bitfinex, a leading cryptocurrency exchange, has won its appeal motion in the New York Supreme Court.

The exchange’s court victory means that they do not have to provide documents shedding light on their use of Tether.

Attorney general’s case against Bitfinex

New York’s attorney general, Letitia James, accused the firm behind Tether of covering Bitfinex losses of up to $900 million using their crypto asset.

Tether is a stablecoin that is backed by the US dollar on a one to one basis. To cover Bitfinex’s losses, Tether minted their cryptocurrency for the crypto exchange.

If the exchange had lost its appeal, it would have been forced to provide documents about its relationship with Tether.

This temporary win allows Bitfinex, and its parent company iFinex, to keep the records out of court until a decision on the appeal to dismiss the entire case has been reached. In August, Justice M. Cohen ruled against a request to obtain similar documents from Tether.

Case may continue after November

New York’s attorney general said that the partial stay means that the companies are not required to provide the documents right now, but they might be requested to do so at a future date.

A spokesperson for the office of the attorney general said that the injunction that prohibits any transactions between Bitfinex and Tether is still in existence.

The attorney general’s office is looking forward to making its case in court as they look to continue their investigation.

A representative of iFinex and Tether Holdings Limited said that they are gratified by the decision and they look forward to addressing all of the issues before the appellate court.

The firms are aware that they might be required to provide the information later if the court decides so.

As it stands, the decision is a set back for the attorney general’s office in their investigation against Bitfinex and Tether.

The case has not reached its final day’s end, and it will likely run until late 2020. Tether and iFinex are required to file more documents to support their motion to dismiss by the 4th of November, 2019, and if they cannot satisfy these requirements, the case will continue.

The case is a landmark case for the crypto industry, and whatever result that comes out of it will have a bearing on other similar cases in the future.

Industry players will be keeping an eye on how the case proceeds going into 2019.

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      A journalist, with experience in web journalism and marketing. Ali holds a master's degree in finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of cryptocurrency publications.