Judge Joel M. Cohen, who oversaw the NYAG investigation into Bitfinex and Tether (here quotation in real time), sentenced Thursday after a one-hour hearing. The crypto companies attorney argued that the request for the documents is too broad while the NYAG office argued that it is reasonable, stating that Bitfinex has not sent enough documents despite the time that has passed since the start of the case.
Cohen did not set a deadline for when Bitfinex and Tether should have produced these documents, leaving the decision to a special referee, but said a deadline would still need to be set.
As part of his court order, he extended an injunction that would expire in the coming weeks, preventing Tether from lending funds to Bitfinex for the next 90 days.
Cohen opened the hearing by noting that the First Department - the appeals court that rejected Bitfinex's latest attempt to dismiss the case - had specifically limited the role it could play in the ongoing investigation.
At the hearing, he refused to take specific decisions limiting the scope of the request for the production of the document. Parties are expected to report the program to the judge after the special referee has made the decision.
"Literally impossible"
"We should be allowed to dismiss the orders," said Charles Michael, a lawyer in the Steptoe and Johnson office, who represents Bitfinex in an ongoing case against the New York Attorney General's office.
Michael went so far as to say that it was "literally impossible to fulfill" all requests for documents, because the NYAG office asked for "all documents" regarding the USDT. John Castiglione, senior executive consultant at NYAG, denied that the office is looking for any documents on USDT transactions, saying the department specifically requested information on orders and exchanges, documents on proof of purchases, tax returns and bank statements. banking - what he called "core business documents". “If there are documents that don't exist or systems that are no longer in place, the defendants should tell us,” he said.
Extension of the lending ban for Tether
Cohen also examined the injunction to prevent Tether from lending funds to Bitfinex, asking Castiglione to justify the extension. The judge responded by saying that the defendants have yet to explain what happened to the first $ 600 million of Tether loaned to Bitfinex and claimed to keep the injunction in place at least until further information is shared.
Specifically, NYAG wants to know where the funds went, if any of the funds went to the company's executives, and why transfers from Tether to Bitfinex were needed. Castiglione also said keeping the injunction in place shouldn't financially harm Bitfinex, assuming all is well.
“What we've heard is that [Tether] started out as a $ 2 billion tether reserve, [and is now] a $ 14 billion tether reserve. So it seems unlikely that losing $ 150 million would be catastrophic, ”Castiglione said.
