Bitfinex/ NYAG: New York Supreme Court grants immediate stay of the document demands

Bitfinex, currently most controversial cryptocurrency exchange, announced that the New York Supreme Court Judge Joel M. Cohen granted the firms’ motion for an immediate stay on the documents demanded by the New York Attorney General. This motion was filed along with the firms’ motion to dismiss the NYAGs investigation, considering that the platform does not provide any services to the people of New York.

To add on, Bitfinex and Tether claimed that the Martin Act was not applicable to their businesses, with their main stance being that the Attorney General has failed to prove Tether as a commodity or a security. The blog post published by Bitfinex stated,

“Bitfinex and Tether filed a motion to dismiss the proceeding brought by the New York Attorney General’s office on the grounds that […] (3) the Martin Act cannot be used extraterritorially to compel a foreign corporation to produce documents stored overseas.”

However, the exchange will be required to disclose documents and information that would be “relevant to the limited issue of whether there is personal jurisdiction over the companies in New York but staying the document order in all other respects.” While one of the motions was granted, the motion to dismiss the case was scheduled to 29th July 2019.

Bitfinex further stated,

“We welcome Justice Cohen’s decision, which reflects that our motion raises significant legal challenges to the validity of the Attorney General’s actions. This order is another victory in the ongoing defence of our businesses against the New York Attorney General’s overreach […]”

In its Memorandum of Law document, the firms had clearly stated that the Attorney General would not succeed, emphasizing that the Martin Act does not apply to Tether as it covered “only transactions in ‘securities or commodities’.” More so, it stated that the Attorney General has so far failed to prove that Tether was either, claiming that the Howey Test does not apply to the coin as it is a stablecoin.

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