{"id":14044,"date":"2019-07-15T21:51:43","date_gmt":"2019-07-15T21:51:43","guid":{"rendered":"https:\/\/davidgerard.co.uk\/blockchain\/?p=14044"},"modified":"2019-07-15T22:03:54","modified_gmt":"2019-07-15T22:03:54","slug":"news-ny-ag-on-bitfinex-tethers-new-york-ties-craig-wright-tries-to-move-kleiman-v-wright-irs-on-criminal-investigations-into-crypto-regulators-still-hate-facebook-libra-trump-vs-libra-and-bitc","status":"publish","type":"post","link":"https:\/\/davidgerard.co.uk\/blockchain\/2019\/07\/15\/news-ny-ag-on-bitfinex-tethers-new-york-ties-craig-wright-tries-to-move-kleiman-v-wright-irs-on-criminal-investigations-into-crypto-regulators-still-hate-facebook-libra-trump-vs-libra-and-bitc\/","title":{"rendered":"News: NY AG on Bitfinex\/Tether’s New York ties, Craig Wright tries to move Kleiman v. Wright, IRS on criminal investigations into crypto, regulators still hate Facebook Libra, Trump vs Libra and Bitcoin, more crypto exchange hacks"},"content":{"rendered":"

The New York Attorney General has dropped a new filing, with 29 exhibits attached, in their case concerning<\/em> \u2014 not yet against<\/i> \u2014 the iFinex companies, including Bitfinex and Tether. This “Memorandum of Law in Opposition to Respondents’ Motion to Dismiss and for an Immediate Stay<\/a>” is not yet a criminal action against iFinex \u2014 it’s merely to keep the investigation open, and to get iFinex to cough up the information already subpoenaed from them.<\/p>\n

Mostly, the NY AG is responding in detail to iFinex’s claims that New York has no jurisdiction over them \u2014 pages 6 and 9 to 11 recount in detail all iFinex’s links to New York State. This is after iFinex’s lawyer Stuart Hoegner had represented earlier in this court proceeding<\/i> that iFinex had banned New York customers as of 30 January 2017.<\/p>\n

For me, what nails it is just how many New York clients Tether has \u2014 including such as Michael Novogratz’ Galaxy Digital, whose letter to BFXNA of 15 October 2018 is attached to the filing. Novogratz claimed<\/a> (archive<\/a>) on 26 April 2019 that “GLXY has zero exposure to Bitfinex or Tether” \u2014 perhaps Galaxy had sold all its tethers by then.<\/p>\n

Bitfinex opened a trading account with “a New York-based virtual currency trading firm” (unnamed, but it’d be Coinbase or Gemini) in January 2019. Documentation of this should<\/i> have been produced by iFinex already \u2014 but wasn’t.<\/p>\n

Giancarlo Devasini told Bitfinex customers to send money via Crypto Capital for fast service \u2014 and, on literally the same day, was frantically contacting Crypto Capital asking why withdrawals weren’t being sent out, and warning that the Bitcoin price could drop below $1000 if Tether Inc. ran out of money.<\/p>\n

Also, iFinex helped New York companies set up foreign shell companies so they could trade with Bitfinex. And loaned<\/i> tethers \u2014 did not sell them, but loaned them \u2014 to “at least one New York based trading firm”. In 2019.<\/p>\n

The facts look really pretty bad. That said, the law is not about just the facts \u2014 it’s about what the facts mean. iFinex have until 22 July to respond, and the next hearing will be 29 July \u2014 perhaps they can successfully argue that two plus two only appears<\/i> to make four, when actually it makes three, or five, or six hundred and sixty-six.<\/p>\n

Oh, Tether accidentally printed five billion tethers<\/a> yesterday.<\/p>\n

By the way \u2014 Wells Fargo “does not allow transactions involving cryptocurrency.”<\/a><\/p>\n

 <\/p>\n

\n

A $600 fraud pump on the incorrect news that Tether had printed $5B. pic.twitter.com\/pZUUQNTM9q<\/a><\/p>\n

— Bitfinex Parody (@Bitfinex2) July 13, 2019<\/a><\/p><\/blockquote>\n