iFinex Inc – the parent company of Crypto Exchange Bitfinex and Stablecoin Issuer Tether (USDT) – has filed a written petition with the New York Supreme Court to postpone the upcoming trial.
According to a file filed with the New York court system on Jan. 19, iFinex Inc’s legal advisor requested an additional 30 days to produce the documents requested by the Attorney General’s Office (OAG).
The document-making process should be completed by January 15, a date that was itself an extension of the original December 16 deadline. The defendant’s lawyer, Charles Michael, said in Tuesday’s court record that “substantial” material had already been turned over to the OAG, but “additional agreed items” remained that had yet to be procured.
The filing noted that in addition to the time required to prepare the relevant documents, additional time needs to be allocated for the OAG to analyze the significance. The registration states:
“It will take the parties a few more weeks to produce the supplementary information so that the OAG can review the production and further discuss what is required if further procedures are required.”
The ongoing lawsuit dates back to April 2019, when the New York attorney general alleged Bitfinex tried to cover the loss of $ 850 million in customer funds by taking out illegal loans from Tether, which it shares management with. The defendants are also charged with making an illegal offer of securities.
The NYAG investigation had previously shown that no more than 74% of Tether stablecoins were actually covered by real cash reserves. This has not yet resulted in USDT worth over $ 24 billion in issuance, and the stablecoin is still involved in the largest volume of spot market trading in the crypto market on a daily basis.
Paulo Ardoini, Bitfinex’s Chief Technology Officer, recently reminded observers on his Twitter account that Tether is registered and regulated on the Financial Crimes Enforcement Network and that any suggestion that USDT is a security is just one example of fear, doubt and uncertainty is or FUD.
Reminder: #Tether is registered and regulated under FinCEN as all centralized competitors. Strict KYC / AML is applied to all direct tether users as do the other major emitters. Only FUD is less regulated. Are you wondering who will benefit from the spread of such misinformation? https://t.co/0izlgpJ75r
– Paolo Ardoino (@paoloardoino) December 30, 2020
Given Tether’s perceived impact on the Bitcoin (BTC) price hike and the extent of its daily use by cryptocurrency traders, many fear that a negative outcome on behalf of iFinex Inc, however justified, will reduce the value of BTC and Bitcoin could affect the rest of the cryptocurrency market.