Tether and Bitfinex petition New York authorities to reduce ban to 45 days
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Editor | Lu Xiaoming
Editor | Lu XiaomingAccording to Coindesk on May 13the recent report
, Tether and Bitfinex parent company iFinex have not yet reached an agreement with the New York Attorney General's Office (NYAG), and the New York Supreme Court may arrange a hearing to resolve the matter.According to new documents filed with the New York Supreme Court on May 13, the NYAG wants to prevent "any affiliated entity" from accessing Tether's reserves and enforce a 90-day injunction against it.
On the other hand, lawyers representing Tether and Bitfinex parent company iFinex want the ban to be reduced to 45 days, and so do Tether-affiliated entities who want to redeem USDT.
On April 25, the New York Attorney General's Office (NYAG) prosecuted the parties for the first time for Bitfinex and Tether's conspiracy to use USDT reserves to cover up losses of $850 million. At the time, Tether provided Bitfinex with a $625 million loan and another $900 million line of credit to keep it afloat in the absence of immediate funding.
In early April, the NYAG accused Bitfinex of receiving nearly $1 billion in loans from Tether without open consultation with Tether customers. However, iFinex claims that the parties reached an agreement in an "arm's length deal" through independent agents.
Lawyers for iFinex wrote in a letter to the court on May 6 that they would agree to certain modifications to the preliminary injunction but would not abandon a previously filed motion to fully withdraw the NYAG's ex parte injunction.
In the original injunction, the NYAG stated that they did not want to prevent Bitfinex or Tether from operating, but asked Tether to stop providing any funds to Bitfinex. However, Bitfinex objected to this.
Lawyers for Bitfinex and Tether “admitted” that the injunction was legal under state law. They can reverse the order, but want the court to "create new regulations".
It is worth noting that the NYAG believes that Bitfinex and Crypto Capital have inconsistent testimony in explaining their relationship, and use this as the reason why Bitfinex needs to clarify the details of the loan.
As previously reported by Finance Magnate, New York Supreme Court Justice Joel M. Cohen said in a hearing on May 6 that he criticized the "substantial and temporary nature" of the preliminary injunction filed by the New York Attorney General's Office (NYAG) in late April. Questioning the scope, the current preliminary injunction is vague, indefinite, and insufficiently targeted to clarify what the NYAG means by imminent harm. It said it would provide lawyers for NYAG, Bitfinex and Tether with a week to negotiate the scope of the ban.
On May 13, lawyers representing iFinex wrote in a letter to the New York Supreme Court that they would agree to certain modifications to the preliminary injunction, but would not abandon a previously proposed motion to completely revoke the NYAG's unilateral injunction. New York Supreme Court Justice Joel M. Cohen, who is in charge of the case, is likely to schedule a hearing in the next few days to resolve disputes in the case, though the timing is unclear.
NYAG’s lawyers wrote in a letter to the New York Supreme Court, “The true holders of Tether (USDT) should be able to convert these tokens into cash, because Tether (USDT) has long played an important role in the market. Tether (USDT) has a high market share.”
Tether believes that NYAG does not have sufficient basis to restrict the rights enjoyed by Tether (USDT) investors, including employees of Tether. Tether believes that NYAG is fulfilling their "gut wall jurisdiction", and Tether believes that strictly speaking, The NYAG can't handle this as a regulator.
NYAG's lawyers said they have no objection to paying Tether's employees, but they want the company to pay them with transaction fees rather than Tether's reserves.
