New York State to continue with Bitfinex investigation, court rules

The New York Office of the Attorney General (NYAG) gains the upper hand in the long-standing jurisdiction battle over Bitfinex investigation as the New York Supreme Court gives a green signal to NYAG for legal proceedings against Bitfinex’s parent company, iFinex.

The legal tussle takes us back to April when the NYAG locked horns with iFinex for collaboratively interfering with funds with sister company Tether, in an attempt to illicitly cover up losses worth eight hundred and fifty million dollars ($850 million).

The exchange platform tried its utmost to cover its tracks by stating that the firm never indulged in business with New York customers and that the NYAG lacks authority over the investigation.

The prosecution of iFinex, primarily based on the supposed Martin Act violations, requires the exchange to commit to full cooperation and disclosures, as demanded by the NYAG. However, the company’s counsel argued that the firm was only engaged in business with foreign entities and no particular state-based investors.

Bitfinex investigation to be led by the NYAG

The hold-up caused by iFinex was short-lived. On Aug 19, the supreme court finally decided to put an end to the war of words and handed the case over to New York jurisdiction for further inquiries. The court not only turns over complete mandate over the proceedings but also arbitrate on the matter.

Per Olta Andoni, head of Ziliak Law’s blockchain practice and an adjunct lecturer at the Chicago-Kent College of Law remarks that the ruling is a significant setback to Bitfinex.

Following the May 22 court order, which granted the firm stay of documents, Bitfinex considered the move as one step closer to the dismissal of legal proceedings.

With the current order, Bitfinex is now required to produce all the requested documents by the NYAG, along with the ones previously ordered, she states.

iFinex will now get 90 days, following the court order, to furnish the requested set of documents concerning the dealings and the associations with the clients.

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