Bitfinex/Tether response to NY AG — quick Twitter thread

I’m writing a news post, and I’ve been waiting all day for these documents to drop, furiously hitting F5 — and iFinex got them in right on the dot of 5:30pm New York time.

Here’s document 111 and document 112. Here’s my Twitter thread, with my very quick read through.

Summary: this is surprisingly good and non-delusional lawyering — about as good as could be achieved, given the awful facts. Their strategy to defy “but 2+2=4” is to deny the existence of 2 and 2. There are some obvious gaps in their arguments. I will be unsurprised if they get a bit more delay out of this, though.

News post tomorrow, with a bit more thought in my responses!

Update: Full post is now up.

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2 Comments on “Bitfinex/Tether response to NY AG — quick Twitter thread”

  1. Amusingly they did however hoist themselves by their own petard in document 111:

    p. 6: “18. In November 2017, Tether ceased servicing customers other than Bitfinex. Thus, as of that date, customer purchases and redemptions of tether could be conducted only through the Bitfinex platform and were therefore subject to Bitfinex’s restrictions on access to that platform. Accordingly, when Tether ceased servicing customers other than Bitfinex in November 2017, it ceased servicing all New York customers.”

    And then they go on to say:

    p. 8: “27. To the extent that tether may be traded on platforms in the United States-such as Poloniex or Bittrex, as alleged by OAG (Doc. 81 at ¶¶ 34-35)-any such trading is part of a secondary tether market over which Bitfinex and Tether have no control and which is independent of the business of Bitfinex or Tether.”

    I fail to see how Bitfinex could be simultaneously the sole market broker to Tether whilst somehow also having no control of the secondary markets with which it is trading. At best, they surely mean “tertiary” because in order for tether trading to be out of the control of the related entities, tether would need to be bought by an eligible non-US party who would then trade it forward to US and/or New York investors.

    Yet we know that this isn’t the way the trade mechanics are working. This means that either they’re lying in this statement about the structure of tether trading or that they misunderstand their own compliance rules.

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