The New York Attorney General’s Office (NYAG) has submitted new evidence in its aim to prove that crypto exchange Bitfinex and Tether had served New York customers longer than they claimed.
As part of the NYAG's ongoing investigation into Bitfinex and Tether, the NYAG filed a Memorandum of Law in Opposition, an affirmation, as well as a total of 28 pieces of exhibits on July 8, with the New York Supreme Court.
The NYAG said in the new documents:
The filings come with various exhibits to showcase Bitfinex's and Tether's interactions with New York residents over a period that was longer than the two previously claimed.
CoinDesk reported in May that Bitfinex and Tether argued with the judge in the New York Supreme Court that the case should be dismissed since they “have nothing to do with New York investors" and "the businesses do not allow New Yorkers on their platforms and do not advertise or otherwise do business here."
However, the NYAG indicated that based on the series of evidence gathered and provided to the court, Bitfnex had customers log in to its platform as recently as Dec. 18, 2018.
Further, Exhibit (S) - H also showed the correspondence between Bitfnex and the billionaire hedge fund manager Michael Novogratz's Galaxy Digital to onboard the latter as Bitfinex's customer in October 2018.
In addition, the NYAG provided exhibits to show that Bitfinex held accounts with two New York banks – Signature Bank and Noble Bank – and at least "one other New York-based financial institution during the relevant time period, which they used to transfer money to and from clients of the Bitfinex and Tether platforms."
The NYAG added:
In the Memorandum of Law in Opposition, the NYAG also took aim at Bitfinex's recent issuance of the LEO exchange platform token.
"Respondents' recent 'initial exchange offering,' for instance, has every indicia of a securities issuance subject to the Martin Act, and there is reason to believe that the issuance is related to the matters under investigation," the NYAG said.
The NYAG first filed a complaint against Bitfinex and Tether in April 2019, alleging that Bitfinex had covered up the loss of more than $850 million by borrowing from Tether's reserves.
Shortly after the NYAG filed the complaint, Bitfinex conducted an initial exchange offering for its own LEO token and one shareholder of the firm claimed it successfully raised $1 billion with commitment from private investors.
Read the full affirmation below:
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.