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Bitfinex and Tether have submitted multiple filings on Monday, claiming that the previous filings of the New York Attorney General (NYAG) were misleading.
The companies’ general counsel Stuart Hoegner alleged that the exhibits presented by the NYAG claiming that New York residents continued to avail the companies’ services longer than previously stated, “contain a number of inaccurate and misleading assertions.”
Hoegner noted that some of the evidence presented by the NYAG that appear to outline how Empire State residents can trade on Bitfinex “make clear that we would only do business with a foreign entity having no presence in New York.” In addition, other documents that described Bitfinex customers based out of New York were actually about “foreign ECPs [eligible contract participants].”
The companies accused the NYAG of trying “to confuse matters by referring to isolated instances where Respondents’ foreign customers have shareholders or other personnel in New York. But in those circumstances, Respondent’s counterparties – the ones with which Respondents actually transacted business – are the foreign entities,” the filing stated.
Thus, Bitfinex argued that the borrower is in fact a foreign entity, whereas the New York trading firm was only used to complete the transactions. Customers are the entity itself and not the traders who work with the ECP.
“While certain ECPs have had shareholders or other personnel in New York, the OAG [the Office of the Attorney General] cannot pierce the corporate veil and pretend that those individuals are Respondents’ customers. They are not; the customer in each instance is the foreign ECP,” the filing read.
In addition, the filing also underscored that the documents filed by the NYAG merely showed “a grab bag of miscellaneous and unrelated New York contacts” and failed to support evidence that investors were affected or harmed by the companies’ activities.
“After broad jurisdictional discovery, OAG has not shown that any aspect of the Crypto Capital relationship or the loan transaction — the basis for the § 354 Order — touched on New York in any way. OAG has failed to identify a single New York customer who was misled or even considered representations about tether’s backing, nor any New Yorker harmed.”
The latest court filing follows after the NYAG alleged that Bitfinex and Tether have carried out extensive New York dealings longer than they claimed, providing services to as late as 2019. NYAG further alleged that Bitfinex still communicated with local traders about their platform activity and fund placement with Crypto Crystal.
As previously reported, Metropolitan Commercial Bank has also allegedly shut down accounts linked to Tether, Bitfinex, and iFinex, although a spokesperson said that accounts only had minimal activity.
