The New York Attorney General’s office is losing patience with Bitfinex and Tether.
NYAG senior enforcement counsel John Castiglione filed a letter Monday ahead of a conference between the regulator and the two cryptocurrency firms arguing it is way time they complied with a 17-month-old document production order detailing financial information within the next two months.
For their part, counsel representing the two firms argue the order is too broad, and the scope should be limited first.
“As of this filing, the 354 Order has been in place for seventeen months. In that time, Respondents have produced ‘jurisdictional’ documents (as directed by this Court) but failed to produce the core information called for in the Order. The delays must stop, and Respondents should be directed to comply promptly,” Castiglione said.
New York State Supreme Court Justice Joel M. Cohen scheduled the hearing for this Thursday, after receiving a request from the NYAG’s office last week complaining that Bitfinex and Tether had yet to turn over any documents.
According to Castiglione, the NYAG is requesting all documents be submitted within 60 days and an injunction preventing Tether from loaning funds to Bitfinex be extended a further 90 days. Charles Michael, an attorney with Steptoe and Johnson LLP representing Bitfinex, opposed any extension of the injunction in his own letter.
“The allegedly concealed facts have been out in the open for 17 months, during which consumers have been free to redeem their tethers without restriction,” he wrote. “Instead, they have chosen to buy, with tethers’ market cap growing six-fold (to over $14 billion).”
In his view, the fact that tether’s market cap has increased this dramatically indicates market confidence in the dollar-pegged cryptocurrency, and negates the justification for the injunction.
“Consumers are well protected today, and do not need OAG’s injunction. The loan transaction supposedly impairing…