James Still Coming After Bitfinex, Claims Late NY Connections


The New York Attorney General’s office is continuing to come after Bitfinex and Tether, filing court documents this week to try to refute some of the claims of the embattled exchange.

Months ago, we saw indignant responses from the exchange and the stablecoin that argued these parties’ innocence in the ‘mystery of the missing $850 million’ with Leticia James’s office suggesting that Bitfinex simply lost the money and covered it up.

A key factor in those filings was the question of whether the exchange was doing business with New York customers.

“The New York Attorney General’s court filings were written in bad faith and are riddled with false assertions,” Bitfinex spokespersons wrote at the time. “Bitfinex and Tether have been fully cooperative with the New York Attorney General’s office, as both companies are with all regulators. The New York Attorney General’s office should focus its efforts on trying to aid and support our recovery efforts.”

A court filing received in New York yesterday shows that the Attorney General as petitioner is submitting evidence that Bitfinex actually did business with New York companies and individuals well into the time frame in question.

”The NYAG indicated that based on the series of evidence gathered and provided to the court, Bitfnex had customers log in to its platform as recently as Dec. 18, 2018,” writes Wolfie Zhao at Coindesk this morning, detailing the controversy as it stands.

The evidence, according to reports,  shows ongoing communications between Bitfinex and Michael Novogratz of Galaxy Digital; Novogratz has often been hailed as a prognosticator for Bitcoin, and is a familiar name in the crypto space, so it’s not surprising that an attempt to show connections might utilize this sort of name-dropping.

The report also shows connections between Bitfinex and New York banks.

“The NYAG provided exhibits to show that Bitfinex held accounts with two New York banks – Signature Bank and Noble Bank – and at least ‘one other New York-based financial institution during the relevant time period, which they used to transfer money to and from clients of the Bitfinex and Tether platforms,’” Zhao writes.

In trying to parse the issue of the New York AG’s case against Bitfinex back when this story broke, people were trying to figure out whether the exchange really did have ongoing business dealings with New York parties.

The evidence submitted seems to put the issue to rest – but there’s still a lot of uncertainty about exactly what’s going to happen around this case.

In general, it shows how certain jurisdictions are pretty unfriendly to cryptocurrency as regulators. We’ll see what happens with the U.S. Securities and Exchange Commission as they continue to work toward better more clarified guidelines on crypto adoption.