Few companies within the cryptoverse have endured as much scandal and controversy as Tether and Bitfinex over the years. One of the earliest issues was Tether being accused of not backing up 100 percent of their tokens with US dollars as they had previously claimed, though they denied this repeatedly. However, an investigation from the New York Attorney General‘s office earlier this year revealed that only 73 percent of the tokens were backed up with US dollars and also that they had given Bitfinex access to hundreds of millions of dollars to cover up some of their losses.
The New York Attorney General Leticia James has recently criticized Bitfinex and Tether for trying to halt the investigations into their dealings after it was revealed that $625 million was transferred from Tether to Bitfinex to cover up their liquidity issues. This is according to a recent filing with York State Supreme Court’s Appellate Division.
The filing question was made on December 4, 2019, but was made public on December 12, 2019, and in the filing, the attorney general stated that both firms were trying to stop the ongoing investigation into fraud. However, representatives for the two companies have spoken out and claim that the New York Attorney General’s office does not have the right to investigate them because the Tethers are not securities.
However, the attorney general has stated that both companies did not meet the requirements to terminate an attorney general’s office investigation and that proceedings will continue regardless of their protests.
“It is particularly perverse for respondents to criticize the adequacy of [the Office of the Attorney General’s] potential legal claims when respondents are the ones who have refused to disclose documents and information that would be directly relevant to their liability,” she said.
Furthermore, the attorney general states that it has been eight months since the firms have been informed to produce several documents relating to the case that could prove or disprove their innocence but that they have not produced such documents.
“No principle of law or rule of procedure allows a subject of an investigation to refuse to comply with that investigation in the face of a lawful court order,” she stated.
Tether and Bitfinex’s lawyers have once again spoken out and stated that they have produced 70,000 pages worth of information and that the attorney generals office is grasping at straws.