Bitfinex: NY attorney general extends submission deadline

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New York Attorney General Letitia James has requested a New York court to extend the deadline for documents submission by iFinex Inc., the parent company of cryptocurrency exchange Bitfinex and Tether. The NYAG’s office has been embroiled in a legal battle with the two companies over alleged $850 million fraud and shadow banking links.

In a letter to New York Supreme Court’s Judge Joel Cohen, James revealed that the production of the requested documents could be finalized in the coming weeks.

She stated, “Since our last communication with the Court, the parties continue to cooperate on the production of documents […] and anticipate that the production could be finalized in the coming weeks. Upon completion, OAG anticipates being able to inform the Court as to its position, and conversely, for Respondents to take position as well.”

The OAG, however, believes that the completion of document submission will come after the deadline set forth by the Court on the September 17 virtual hearing.

“Accordingly, the parties request that (i) the deadline for submission(s) by the OAG and Respondents regarding the injunction be extended to Friday, January 15, 2020, and that (ii) the status quo regarding the 354 Order (including the injunction) continue until that date.”

It’s assumed that the date was a typo, and that James is requesting for an extension to January 15, 2021.

As CoinGeek reported, the NYAG’s office filed an order on September 8, requesting a virtual hearing with iFinex. A week later, the hearing took place, with the NYAG requesting that the court compels iFinex to turn over all the documents her office had requested relating to the case. The court gave the company 90 days to comply, a time period that’s set to end in a week’s time.

James first filed the case against Bitfinex in April last year, accusing the company of conspiring with Tether to cover up an $850 million loss. The exchange had allegedly started to struggle with client withdrawals a few months prior following the massive loss. As a result, it tapped into Tether’s stablecoin cash reserves, gaining access to $900 million in undocumented funds.

Since the first filing, the NYAG and iFinex have been engaged in legal battles, with the company fighting to have the case dismissed. Its latest strategy has been fighting an order by the NYAG to submit documents relating to the alleged fraud. Just as with all its previous antics, this one seems to be coming to an end. If the court grants the NYAG’s latest request, she will be in possession of these documents in a month’s time.

Aside from the $850 million fraud case, the two companies have been accused of other crimes, including market manipulation. Bitfinex is currently fighting these manipulation charges, alongside Poloniex, at a New York court. Tether has also been found to be used by criminals including in China for money laundering and in the U.S. to bribe public officials.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.