Metropolitan Bank Clarifies Its Ties with Tether & Co. Author: Jimmy Aki Last Updated: 17 June 2020 Earlier today, industry news medium CoinDesk reported that the Metropolitan Bank, a banking institution based out of New York City, had asked Tether to close its accounts domiciled with the bank. Inactivity-led closure While Tether and its affiliates have been operating as many as three separate accounts with the bank over less than a year now, the news outlet, citing a bank spokesperson, revealed that the stablecoin operator- as well as its sister companies- hadn’t done much with the accounts. Thus, the bank felt that the consistent inactivity was grounds enough to ask all entities to close their accounts. Jurisdiction battles The entire saga seemed to have been in response to a filing by the Office of New York’s Attorney General (ONYAG), in which it claimed that it had the right to investigate Tether and its affiliates- iFinex (its operator) and Digfinex- based on grounds that they maintained accounts with banks in its jurisdiction. For proper reference, the ONYAG is in the midst of a legal battle with Tether and Bitxinex, a cryptocurrency exchanges operated by iFinex. The legal authority claimed as far back as May that Bitfinex had withdrawn as much as $850 million in its Tether reserves in a bid to cover up funds which had either been misappropriated or stolen. While multiple filings have gone into effect since the case was originally taken to court a little over a month ago, the latest debacle seems to hinge on whether the ONYAG has the legal authority to investigate any of the corporations. As expected, the Attorney General’s Office believes that it can, given that both companies allegedly operate in New York. However, the defendants have expressed their disagreement with the premise, as they expressly stated in three separate May filings. At the time, both companies had maintained that they hadn’t done any business in New York in 2019, thereby directly questioning the ONYAG’s right to investigate them in the first place. In addition, they pointed out that the ONYAG’s original filing had made mention of the Martin Act; a stock trading, securities, and commodities statute which specifically applies within the confines of New York. NYAG fights back The ONYAG, however, fired back with 30 document filings of its own a month later, all of which seemed to allude to both companies’ presence in the state within the specified time period. New York Attorney General Brian Whitehurst filed an affirmation against the dismissal of the case as well, in which he gave details about the exhibits he presented. He went on to file the “Memorandum of Law in Opposition to Respondents’ Motion to Dismiss and For an Immediate Stay,” an official memorandum which provided even more insight into his opposition’s New York dealings. In the document, the AG claimed that his Office had shown the applicability of the Martin Act in this case, especially considering that both companies had “many and deep” ties to the state. It’s still unclear what this account closure means to the case, although given how extensive the ONYAG’s proof to tie any of the companies to the state was, it would most likely find another firm to harp on.