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Bitfinex fights back against NYAG, says it never served New York customers

Bitfinex fights back against NYAG, says it never served New York customers

iFinex, the company that owns and operates Tether and Bitfinex, said that the claims made by the New York Attorney General’s office that the companies served New York residents throughout last year were “misleading.” The company’s latest legal filing asserts that the alleged “New York customers” were foreign ECPs who worked through New York-based traders.

Bitfinex’s fight against NYAG continues

iFinex, the company that owns and operates cryptocurrency exchange Bitfinex and stablecoin issuer Tether, has been engaged in a high-stakes legal battle with the New York Attorney General’s office for over three months. Back in April, the company was accused by the New York Attorney General’s Office (NYAG) of conducting illegal operations in New York and having an unlawful relationship between its two legally distinct entities.

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In the recently released filings from New York’s Supreme Court, NYAG accused iFinex of allowing New York-based users to access its platform and utilize its services despite an explicit ban introduced back in 2015.

iFinex’s legal team responded to the allegations by accusing the NYAG of making “misleading” arguments in their case. According to the court filings released on July 22, iFinex said that the company’s alleged “New York connections” were made to appear stronger than they actually were.

The company said that the New York-based trading firm it allegedly opened an account with was, in fact, a foreign entity and that the New York firm was only used as a medium to complete the transaction.

New York-based companies actually “foreign entities,” iFinex claims

iFinex also said that the NYAG made more misleading claims in their Whitehurst Affirmation. The document, which contains a list of Eligible Contract Participants (ECPs), shows that a professional trading company logged into Bitfinex from New York.

“[NYAG] tries to confuse matters by referring to isolated instances where Respondents’ foreign customers have shareholders or other personnel in New York,” the company said in the filings. “But in those circumstances, Respondents’ counterparties — the ones with which Respondents actually transacted business — are the foreign entities.”

The argument iFinex was making is that, as far as they’re concerned, their customers were the foreign entities, and not the traders working with ECPs as the NYAG alleged.

In the court documents, the company said that the New York Attorney General’s office has failed to identify “a single New York customer” who was harmed or misled by the company. If iFinex manages to dismiss the accusations that they acted outside of their jurisdiction, which is a major point of contention in the NYAG’s case against the company, it would increase their chances of dismissing the entire case against them.

We are yet to see how the NYAG reacts to this and whether the increasing controversy has any effect on the price of Tether and Bitfinex’s trading volume.

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Priyeshu Garg

Priyeshu Garg

Crypto Analyst @ CryptoSlate

Priyeshu is a software engineer who is passionate about machine learning and blockchain technology. He holds an engineering degree in computer science engineering and is a passionate economist. He built his first digital marketing startup when he was a teenager, and worked with multiple Fortune 500 companies along with smaller firms. When he is not solving transportation problems at his company (Ola), he can be found writing about the blockchain or roller skating with his friends.

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