Bitfinex Face New York Allegations Over $850M In Lost Funds

Bitfinex face New York allegations over $850 million in lost funds. In April 2019, New York prosecutors charged that Bitfinex lost $850 million in consumer and corporate assets, and used money from associated stablecoin tether to cover the shortfall. The Ruling was first stated by Bloomberg.

iFinex, which operates both Bitfinex and Tether, argued that the funds had been deposited with a Panama-based company and were later seized in various countries by authorities. The company had also said earlier that it has been trying to retrieve the funds frozen by the governments of Portugal, Poland and the United States.

The appeals court rejected the argument that tether was neither a commodity nor a security, and affirmed the stablecoin falls under the court’s jurisdiction.

“Not even virtual currencies are above the law,” New York Attorney General Letitia James told CoinDesk in a statement.

As it’s headquartered in Hong Kong and registered in the British Virgin Islands, Bitfinex also argued it does not fall under the jurisdiction of state authorities and doesn’t cater to local traders.

The court rejected the argument on the grounds the Attorney General’s office was seeking documents going back to 2015, and iFinex permitted New York customers to trade on the Bitfinex platform until January 2017. In addition, the court noted some of the firm’s executives was based out of New York.

“We will respect the court’s order. We have no further comment on this matter at this time,” BitFinex’s General Counsel Stuart Hoegner said in an emailed statement.

[image: Oliver Niblett]

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