New York AG Submits Fresh Evidence Against iFinex

The prosecutor first charged the company for illegal dealings in April this year.

The New York Attorney General’s Office (NYAG) on Monday submitted fresh evidence against iFinex, the parent company of Bitfinex and Tether, alleging that the company served New York customers longer than it should.

The prosecutor first filled a complaint against Bitfinex and Tether last April, accusing the exchange of illegally serving New York-based clients. It also accused the exchange of securing a loan of $700 million from its sister company Tether to cover a loss of $850 million incurred with its payment processor Crypto Capital.

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However, the company challenged the claims of the NYAG in court, mentioning that the prosecutor neither has jurisdiction nor has evidence to prove its claims.

In the recent court filings, the NYAG submitted 28 pieces of exhibits to the New York Supreme Court, which proved that Bitfinex allowed New York-based customers to log in to their accounts as recently as January.

“Even a cursory examination of the facts gathered to date in the OAG’ s investigation shows that Respondents have extensive and consistent contacts to New York concerning the matters under investigation,” the NYAG stated in the documents.

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Maintaining bank accounts

Moreover, the exhibits also showed that the crypto exchange held accounts with two New York-based banks – Signature Bank and Noble Bank – along with at least another unnamed financial institution, which helped in the transfer of funds between the clients and both the platforms.

“Respondents have repeatedly engaged New York firms to assist them in their business objectives, including to make statements to the markets about the operation of the Bitfinex trading platform and the cash backing of tethers; and as recently as 2019, Respondents opened a trading account with at least one New York-based virtual currency firm,” the filing added.

After the allegations of the prosecutor, iFinex raised $1 billion by selling the platforms’ native LEO 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 added.

Meanwhile, Bitfinex recently announced that it repaid $100 million to Tether for the loan along with the incurred interests. The exchange also announced that it bought LEO tokens from the market with 27 percent of the revenue generated from its initial exchange offering (IEO) platform to burn them.

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