New York attorney general keeps pressure on Bitfinex despite court-granted stay

The New York Attorney General is to keep the pressure up on embattled exchange Bitfinex, even after a court decided to grant the firm a reprieve until November to produce requested documents, CoinDesk reported.

In a letter written by senior enforcement counsel John Castiglione, the NYAG said the courts should not allow Bitfinex to continue to blank the investigation, with the firm so far found to be uncooperative with the demands of the Attorney General.

The Attorney General has been investigating Bitfinex over the loss of almost $1 billion in client funds, and the subsequent transfer of assets from its sister company Tether. Crucially, according to the Attorney General, the money from Tether came from dollar reserves, which investors believed were being held in Tether to support the value of the stablecoin on a 1:1 basis.

In the letter, senior enforcement counsel John Castiglione said that Bitfinex had yet to obey previous court orders, and had yet to make any submissions on the documents sought by the Attorney General.

Even though one month elapsed between the issuance of this Court’s August 19 Order and the stay, no documents were produced. That means that since the granting of the 354 Order in April, Respondents have failed to produce a single non-jurisdictional document.

Bitfinex’s latest appeal is expected to prolong the investigation and the case against the firm by several more months. According to the letter, the court should continue to insist on the timely delivery of documents to avoid further delay.

It noted, “Unless the Court directs Respondents to collect these materials now, what will happen is predictable: Respondents will, upon lifting of the stay, argue for more time to search and collect materials, file more motions challenging the scope of the 354 Order, and otherwise take whatever steps they believe will be tolerated by the Court to further delay the OAG’ s investigation.”

“By ordering Respondents to get materials in order now, the Court will ensure an orderly process and will facilitate the conclusion of the OAG’ s investigation.”

Representatives for Bitfinex told CoinDesk the firm remains satisfied with the court’s latest decision to grant the extension until November.

We will reserve any further comment in this matter until we respond directly to the court.

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