Like all the other embittered nocoiners who are salty at not having bought up big on tethers, I spent all day yesterday frantically pressing “refresh” on the docket for Attorney General of the State of New York v. iFinex Inc. et al — waiting for iFinex’s response to the New York Attorney General’s 8 July filing that details iFinex’s extensive links to New York.
iFinex needs to deny that 2+2=4. Their strategy is to deny the existence of 2 and 2, and cast doubt on the concept of addition.
The Reply Affirmation of Stuart Hoegner starts by asserting that Hoegner is definitely not present in the US — but he is an attorney in the US.
The rest of his reply mostly goes “yeah, but no, but yeah, but”:
- iFinex only deals with non-US entities (“ECPs,” or “Eligible Contract Participants”). All of the NY AG’s long list of New York customers are actually foreign entities — despite the New York addresses.
- We tried really hard to get rid of US customers. Any US customers would be breaking the terms of service! (Bitfinex’s Know-Your-Customer was famously lax — until you tried withdrawing, ahahaha — and they only began tightening it last month.)
- Our New York customer we lent completely unbacked tethers to is also totally foreign. (Hoegner doesn’t deny the loan.)
- The New York exchange account we set up totally didn’t concern tethers! (The NY AG didn’t say it did — just that Bitfinex had set up an account with a New York-based exchange.)
- We might have helped our customers set up companies to trade with us, but those totally weren’t just “shell” companies.
- The bit of Michael Novogratz’ Galaxy Digital we dealt with is a foreign entity too, despite appearing to be a New York company with a New York address, full of New York-based employees.
- Press releases we put on the World Wide Web are not “published” to the New York market, somehow.
- You say we aren’t producing the documents you asked for — but we totally produced a lot of documents!
- LEO tokens as securities: yeah but no but yeah but.
- “Bitfinex is financially healthy and growing” (literal quote).
The Respondents’ Reply Memorandum Of Law In Further Support Of Their Motion To Dismiss starts with munchkiny procedural details as to why their motion to dismiss is proper. This part is somewhere between “pounding the law” and “pounding the table.”
iFinex assert again that the Court lacks jurisdiction over Bitfinex and Tether. This section starts with two pages of flailing that service was defective, as if New York having sent email rather than a registered letter means the case should be thrown out — and as if they aren’t standing right there in court.
Furthermore, the Court lacks subject matter jurisdiction under the Martin Act (NY securities legislation), because nobody here is in New York — not even the trader on Bitfinex, who they admit exists, who lives, works and eats in New York.
The NY AG totally hasn’t shown that Bitfinex or Tether does business in New York! And never mind all the detail the AG used to show it.
iFinex finish by asserting that the Martin Act cannot compel a non-New York entity to produce documents.
I’d rate this “a fine try” and “less insane than I was expecting.” This is surprisingly good and non-delusional lawyering from iFinex, and about as good as could be done given the awful facts.
I will be amazed if this gets the action against iFinex dismissed. But I won’t be surprised if iFinex get at least a little more delay out of this one when they go back into court on 29 July.
Oh, and Tether accidentally fat-fingered, and printed five billion tethers. Good thing that Tether is completely centralised and reversible!
things that are in no way related to New York, according to Bitfinex:
-People that reside in New York
-Companies whose HQ is in New York
-Accounts at NY banks
-PR companies literally in NY
-IP addresses literally in NY
-New York, New York
— Kyle S. Gibson (@KyleSGibson) July 23, 2019
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