The fight between Bitfinex and NYAG has taken a new turn after the exchange claimed that the current order by the New York Attorney General (NYAG) might lead to a decline in clients. Consequently, Bitfinex’s failure to access Tether’s reserves may hurt the entire crypto market.
According to the attorneys representing Bitfinex in the case brought against it by the NYAG, the court orders obtained by the AG to stop the exchange which is operated by iFinex from conducting financial undertakings, should be terminated.
According Coindesk, the attorneys argued:
The balance of equities strongly favors Bitfinex and Tether, because a preliminary injunction would not protect anyone but would instead cause great disruption to Bitfinex and Tether — ultimately to the detriment of market participants on whose behalf the Attorney General purports to be acting.
Since filing the injunctions, Bitfinex clients have withdrawn one million ether and 30,000 Bitcoin. This signifies that it had a significant impact on the exchange. An order surfaced in April 24 indicating that the crypto market lost $10 billion within an hour.
Tether’s actively operational despite the proceedings. Earlier, the preliminary injunction charged under a New York state law called Martin Act, requires tether and Bitfinex to produce every document pertaining to a transfer of $625 million following $900 million credit tether issued to Bitfinex after losing $850 million that was being held by Crypto Capital, a payment processor based in Panama.
In the past Zoe Philips, a lawyer helping Tether clear its name from the AG’s allegations, said that the AG should not expect the stablecoin, USDT, to be held at 1:1 ratio against the U.S dollar. However, in the NYAG’s views, “Tether must hold its $2.1 billion cash reserves as is,” so that USDT can have an assured 1:1 tether on the U.S dollar.
Do you think the struggle between Bitfinex and NYAG will hurt Bitcoin and the entire crypto market?
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