- The legal battle between the New York Attorney General and iFinex could get a court date within days
- The deadline by which iFinex, Bitfinex, and Tether were supposed to provide a tranche of documents regarding an $850 million loan has passed
- A “court conference” date is due to be set any day
The ongoing legal dispute between New York Attorney General Laetitia James and iFinex, parent company of both Bitfinex and Tether, is set to enter the next crucial stage, potentially within days. The iFinex legal team is due to either “provide a final status upgrade or schedule a conference” with the court according to the company’s legal counsel Stuart Hoegner after the deadline for the defendants to produce a tranche of documents regarding their activities passed last week.
Bitfinex on the Hook for $850 Million Tether Loan
James v iFinex et al. dates back to April 2019 when James obtained a court order against iFinex on allegations that it had “defrauded New York investors that trade in virtual or “crypto” currency.” The accusations center around an $850 million loan that Tether made to Bitfinex to cover up what was labelled “a cover-up to hide the apparent loss of $850 million dollars of co-mingled client and corporate funds”.
The loan was made after Bitfinex lost access to the $850 million in 2018 thanks to Crypto Capital, an unregistered Panamanian financial services company Bitfinex was using at the time. Tether and Bitfinex allegedly engaged in “conflicted corporate transactions” that allowed the stablecoin issuer to prop up the exchange in the aftermath, a loan that was recently paid back in full, according to Hoegner.
Document Handover Date Passes
The case has rumbled on since then, with January 15 being the date on which iFinex was due to produce a cache of documents requested by the NYAG relating to the deal. Four days after this date Hoegner wrote to the judge in the case, Judge Joel Cohen, to report that they had “largely completed the document production” and that “there remain supplemental agreed-upon items that need to be completed.”
Hoegner added that they would be in touch with the court “in approximately 30 days” where a court hearing could be scheduled. This is now the 38th day, so we can presume that any day now will see a potential court hearing set for the case.
The issue of whether Tether is 100% backed will be of much more importance to the crypto community over any wrongdoing by Bitfinex and Tether over the loan, although it is not known yet what evidence will be provided to back up Tether’s claims of full backing and indeed if any resolution on the matter will be forthcoming.