According to a Forbes report, Bitfinex, the crypto exchange, was handed its first victory in court in its ongoing legal tussle with the New York Attorney General’s office. The appellate division of the state’s Supreme Court granted the stay order that was requested by the exchange.
What the Ruling Means
For now, the exchange will not have to provide documents requested by the AG about its use of the Tether crypto coin. The New York attorney general contends that Bitfinex has mined Tether, which is backed by the USD on a 1:1 ratio, for about $900 million.
If the appeal by Bitfinex had been turned down, the exchange would have had to comply in full with the AG’s request. The exchange is presenting this a major win but it is only a temporary one. New York’s attorney general sued the exchange in April 2019. The lawsuit alleged that Bitfinex was essentially loaned $900 million by Tether Holdings, which is the entity that supervises the production of Tether USDT. It is alleged that Bitfinex used this amount to enter and exit a slew of investments. Currently, Tether has a market cap of over $4 billion and it is the fourth largest crypto coin by market cap. It has daily trading volumes of $24 billion according to data from CoinMarketCap.
What Tipped the Balance In Favor of Bitfinex Exchange
While making his ruling, the judge noted that New York or any other entity had not made an official complaint against Tether or Bitfinex pertaining to the issue. In light of this, the judge ruled that the company was not obliged to share documents with the AG’s office.
The stay order means that Bitfinex does not have to comply with any document requests from the AG. However, it is worth noting that the exchange had earlier filed a motion for dismissal in August, which was turned down. This stay order is only temporary until the motion to dismiss the whole case is heard and a ruling made.
What the AG Had to Say
The AG’s office said that while they will not be able to get the documents they need due to the stay order, the company might still have to submit documents in the future. Besides that, the office noted that the order barring the transfer of funds between Bitfinex and Tether had not been removed. A spokesperson for the office added that they were looking forward to making their argument in court. In the ruling, it was made clear that it would only be effective if the exchange filed the documents for the appeal for the dismissal of the case by November 4, 2019.
Bitfinex BTC
Since the start of the legal tussle with the New York AG, trading volumes have fallen a great deal. If the company eventually loses its final appeal, traders could depart from the exchange altogether. When looking at historical data, the exchange has lost about 97% of its BTC trading activities.
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