In a filing with the New York State Supreme Court’s Appellate Division, New York Attorney General Letitia James roundly criticized the efforts of Bitfinex and Tether to halt her office’s investigation into the companies. Bitfinex and Tether are under investigation for an accounting coverup in which Bitfinex is alleged to have improperly transferred $625 million that had been backing the Tether stablecoin in order to conceal Bitfinex’s liquidity shortfall.
In the filing from Dec. 4 but made public on Dec. 12, Attorney General James wrote that Bitfinex and Tether are attempting to stop the “ongoing investigation by the Office of the Attorney General into potential securities and commodities fraud.”
Lawyers for Bitfinex and Tether responded in a filing today, saying that the NYAG does not have authority to investigate the companies because “tethers are not securities or commodities.”
Nonetheless, Attorney General James’ filing pointed out that both companies have now failed twice to meet the “exceptionally high threshold” to terminate an NYAG investigation once it has been authorized. James did not mince her words when she said:
“It is particularly perverse for respondents to criticize the adequacy of [the Office of the Attorney General’s] potential legal claims when respondents are the ones who have refused to disclose documents and information that would be directly relevant to their liability.”
James argued that the Bitfinex and Tether are effectively attempting to dismiss an NYAG lawsuit when there is in fact not yet any such lawsuit — only an investigation, which may lead to a lawsuit in the future.
Bitfinex and Tether continue to evade court order?
James continued by saying that it has now been more than eight months since the court-issued order compelling the Bitfinex and Tether to produce documents relevant to the investigation.
However, according to James, Bitfinex and Tether continue to evade the court order and have not yet produced…