The New York Attorney General’s Office is insisting that Tether and Bitfinex provide financial documents relating to the nearly $1 billion loan. New York prosecutors accused both companies of concealing losses.
The New York Attorney General’s Office has filed a petition, claiming that stablecoin provider Tether had delayed the production of key financial documents in a case of possible undue concealment of losses. The Attorney General’s office accuses the companies of improperly concealing about $1 billion in losses of customers’ assets from Bitfinex through reserves provided to it by the stablecoin issuer Tether, which is a Bitfinex-affiliated company.
The petition states that both companies were required to provide financial documents within 60 days, but they never complied with this requirement. In addition, NYAG is asking the court to extend the ban that prevents Tether from lending to Bitfinex by 90 days. After receiving the petition, New York State Supreme Court set a hearing for September 17, 2020.
Tether and Bitfinex argue that the Attorney General’s request was too vague, and they sent some financial documents to the Attorney General’s office in New York.
Charles Michael, attorney for the law firm Steptoe and Johnson LLP, who represents Bitfinex and Tether in court, sent a letter to the court asking to narrow down the list of required financial documents, as the Attorney General’s Office now requires all documents and messages regarding any transaction, and this request is “impossibly overbroad” because it covers all of Tether’s activities.
“Asking Tether for all documents about transactions in tethers is akin to asking GM for all documents about cars.”
The New York Attorney General’s Office opened an investigation against Tether and Bitfinex in April 2019.