Bitfinex/Tether: Court grants show cause order requested by exchange’s legal counsel

Bitfinex, one of the largest cryptocurrency exchanges in the world, has been the highlight of the cryptocurrency space ever since the NY Attorney General opened an investigation into the exchange alleging fraud. The exchange was back in the limelight after the court granted its request for a show cause notice.

The document released by the Attorney General revealed that the exchange used USDT reserves to cover up its losses, issuing an ex parte order. Notably, this was soon met by the exchange’s legal counsel releasing a memorandum of law, where the 30-page document explained that the claims made by the NY AG were flawed and that it would not hold in a court of law.

The court document also requested a motion for an Order to Show Cause, to vacate or modify the ex parte order and an immediate stay on the order. This means that the New York Attorney General would be required to prove her claims in court, otherwise, it would be required to make the necessary changes or to even modify the charge. While an immediate stay on the order means that the exchange would not have to produce the documents demanded by the NY AG within the set deadline, 3rd May 2019.

According to a document released by Stephen Palley, a prominent lawyer in the cryptocurrency space, NY AG will be required to prove its claims on 6th May 2019. He stated on Twitter,

“It is not at all unusual for a Court to issue a show cause order after issuing an ex parte Order, where respondent has briefed an opposition. Whatever you think of Bitfinex or Tether (or the merits of their argument), we live in a country where state actors can be challenged.”

Source: Stephen Palley/ Twitter

He further added,

“I would have done the exact same thing if I were this judge. Now the State AG has an opportunity to explain why the other side is wrong, and why the Order should stand. Then the Court will rule. This is exactly how it should be.”

The post Bitfinex/Tether: Court grants show cause order requested by exchange’s legal counsel appeared first on AMBCrypto.