Bitfinex, Tether disagree with NYAG regarding access to USDT reserves

14 May, 2019
by Fifi Arisandi
Update
Bitfinex, Tether disagree with NYAG regarding access to USDT reserves

An update just emerged from the legal case that involves Bitfinex & Tether. The disputing parties are reported to have failed to agree on what Tether should be allowed to do with its holdings.

Based on the new court documents filed on Monday, the New York Attorney General’s (NYAG) office wants to prevent any affiliated entity from accessing Tether’s funds reserve and a 90-day injunction.

Tether and Bitfinex, on the other hand, want a 45-day injunction along with an access for affiliated entities, so that any parties who want to redeem Tether will be allowed to do so.

To recap, the legal dispute began when the NYAG Office accused Bitfinex for covering up a $850 million loss by printing up Tether earlier this month.

Both immediately denied the accusations, claiming that the NYAG court filings were written in bad faith and riddled with false assertions.

In a letter to the court, the attorneys that represent iFinex, the parent company of Bitfinex stated that they agree to certain changes to the preliminary injunction, without waiving their previous motion to vacate NYAG’s Ex Parte order entirely.

Their main objection seems to be more about the access restriction to Tether, which the attorneys said, “If [Tether] simply held the proceeds in cash, the company would not earn the money required to fund its operations.”

They also argue that NYAG has no basis whatsoever to cut the ability of Tether holders, who happened to be affiliated with the company, such as Tether employees to redeem USDT. Thus, they believe that the NYAG’s argument presents a “gross overreach”, given that it’s not actually a regulator.

Responding to the statement, the NYAG’s attorneys said that they are not against the employees from getting paid, but they want the company to pay them using transaction fees, rather than its reserves.

Moreover, the NYAG attorneys’ letter to the court stated that bona fide holders of Tether should be able to redeem those tokens for cash, as Tether has long represented to the market.

Quoting the letter, “Further, the OAG’ s proposed modifications do not restrain Tether from placing the reserves in legitimate interest-bearing or similar cash equivalent accounts, as the OAG understands Tether to have previously done.”

Judge Joel M. Cohen is expected to schedule a hearing to reconcile the differences in the proposals in the coming days, as reported by Coindesk.

Follow Chepicap now on Twitter, YouTubeTelegram and Facebook!

Chepicap is now LIVE in Blockfolio! This is how you receive our latest news in your portfolio tracker!  

Add a comment

Check out the latest news

You will be logged out and redirected to the homepage