A New York judge ordered crypto exchange Bitfinex and its affiliated stablecoin issuer Tether to turn over documentation about a loan and a line of credit Tether provided to Bitfinex.
Judge Joel Cohen, of the state’s Supreme Court, echoed comments from a preliminary hearing held last week in New York City in an opinion published late Thursday, ordering Bitfinex and Tether execs and employees stop loaning Tether’s reserves to Bitfinex, alongside a number of other stipulations during an ongoing investigation by the New York Attorney General’s office (NYAG).
“The Court finds that the preliminary injunction should be tailored to address OAG’s legitimate law enforcement concerns while not unnecessarily interfering with Respondents’ legitimate business activities,” he wrote.
Specifically, the judge ordered:
- Tether cannot loan any assets to Bitfinex or other parties, except in the normal course of conducting its business;
- Tether cannot distribute any funds from its reserves to executives, employees, or other individuals except for payroll and normal contractor, consultant or vendor payments;
- Neither Bitfinex nor Tether are allowed to modify in any way documents asked for in the NYAG’s original subpoenas; and
- The injunction will expire in 90 days, but the NYAG’s office can petition the court to extend it two weeks before then.
In a statement, Bitfinex praised the judge’s decision, writing:
“We believe that the court’s decision today leaves no doubt that both Tether and Bitfinex are entitled to run their businesses in the ordinary course, even during the short period when this now narrowed preliminary injunction is in place.”
The exchange also said that the NYAG’s office acted in “bad faith,” saying it ignored “our previous historical, and voluntary co-operation with them.”
“We will vigorously defend against any action by the New York Attorney General’s office, and we remain committed, as ever, to protecting our customers, our business, and our community against their meritless claims,” the exchange concluded.
Bitfinex image via Shutterstock