There are few companies within the crypto space that have seen as much controversy as Bitfinex and Tether in recent times. For a long time, Tether had been accused of being a bitcoin manipulation tool and of not backing up all their tokens with US Dollars as they had previously claimed and the company released documents to debunk such claims and repeatedly defended themselves. Still, the rumors persisted and an investigation was opened by the New York attorney general’s office that revealed that only 73 percent of Tether’s reserves were backed up in US dollars and also that they had given access to their reserves to Bitfinex to cover millions of dollars in losses.


In the most recent development in the case,both firms had attempted to have the case dismissed over claims that the New York attorney general’s office did not have jurisdiction over them but saw their request denied by judge Joel Cohen who ruled that the New York attorney general has jurisdiction over the two companies will continue to prosecute them over the Martin Act .

The Response from Bitfinex and Tether

Following this decision in court, both Bitfinex and Tether published responses on August 20, 2019, on their respective blogs in which they claim that the investigation from the New York attorney general’s office lacks merit and also that they will be pursuing an appeal.

The complaint against iFinex, Bitfinex, and Tether were first leveled in April 2019 in which was alleged that they had defrauded investors by covering up to $850 million in losses on the Bitfinex trading platform.

“Our investigation has determined that the operators of the ‘Bitfinex’ trading platform, who also control the ‘tether’ virtual currency, have engaged in a cover-up to hide the apparent loss of $850 million dollars of co-mingled client and corporate funds,” said Attorney General Letitia James. 

After this took place, the firms tried to have the case dismissed on the basis of jurisdiction but clearly, the judge did not support that argument and thus, the investigation will continue. With all the facts that have already been uncovered from the investigation thus far, it will be interesting to see just what else comes to light about both Bitfinex, Tether and the crypto industry in general as the investigation proceeds.

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