[2019-05-21] Bitfinex Argues Why Judge Should Dismiss NYAG Case in Latest Case - page 2.

bryant.coleman

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Quote from: gentlemand on August 19, 2019, 05:33:58 PM

https://www.theblockcrypto.com/2019/08/19/court-rules-it-has-jurisdiction-over-bitfinex-allowing-nyag-to-continue-investigation/

No dice for Bitfinex. The state court or whatever has ruled that they do have jurisdiction over Bitfinex so the investigation continues into their pesky conduct. What the US wants, the US gets.

No surprises there. I was expecting something like this. Now the big question is what will happen to the frozen funds (which according to Bitfinex is worth close to $600 million). It is going to be tough for Bitfinex. If the court battle drags on for a few years, then these funds will remain frozen and the exchange will start to suffer from liquidity issues. And the users are definitely going to blame them, as they were not exactly transparent in various deals. The most tragic outcome of this whole drama is that Tether is no longer regarded as a reliable cryptocurrency now, after they extended the line of credit to Bitfinex. How can you extend a loan using your backup funds?

gentlemand

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Welt Am Draht

https://www.theblockcrypto.com/2019/08/19/court-rules-it-has-jurisdiction-over-bitfinex-allowing-nyag-to-continue-investigation/

No dice for Bitfinex. The state court or whatever has ruled that they do have jurisdiction over Bitfinex so the investigation continues into their pesky conduct. What the US wants, the US gets.

bbc.reporter

legendary

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@squatter. Any win for Bitfinex is a win for the whole cryptospace. However, some people might not take it that way yet hehehe.

Also, this Cohen might be giving up. There are more ICOs than he has time to investgate hehehe.

The Securities and Exchange Commision’s (SEC) chief of the Cyber Unit will step down in August, according to a statement.

Robert A. Cohen will abdicate his role as executive enforcer for the cyber division founded in 2017, after 15 years of SEC service.

Read in full https://www.coindesk.com/sec-cyber-unit-chief-that-pursued-actions-against-icos-kik-to-resign

squatter

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STOP SNITCHIN'

New update on the Bitfinex/NYAG saga: Judge Punts on Decision in New York Case Against Bitfinex and Tether

The Attorney General's office came out firing in its last filing. I honestly thought the judge would quickly decide in the state's favor. It looked like they had established jurisdiction. Apparently, the judge isn't so sure about that:

Quote

On Monday, New York Supreme Court Judge Joel M. Cohen said he needed more time to make a final decision on whether to dismiss the NYAG’s case entirely, or rule the other way and reject Bitfinex and Tether’s motion to dismiss. As such, a preliminary injunction he filed in May will be extended, probably for 90 days.

“I will extend the injunction … if I dismiss the case then obviously the injunction goes with it. If I don’t dismiss the case the injunction will be extended,” Cohen said, adding: “The idea is to keep things where they are until the decision of this motion, so the decision is to extend the stay and … extend the injunction.”

The ruling means Bitfinex and Tether can continue operating their businesses as normal, but Tether still cannot lend any more funds to Bitfinex.

If Bitfinex wins and has the case dismissed, it'll lend some credence to the idea that their policies re: US persons might hold up at the federal level as well.

figmentofmyass

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Quote from: bbc.reporter on July 22, 2019, 11:21:51 PM

I am shaking my head in confusion. Who is lying? Who is telling the truth? I reckon they might be both lying. Bitfinex is looking for ambiguity to evade the law, the New York attorney general's office is looking for minor details to charge Bitfinex.

it's possible neither one is lying. bitfinex has always been open about the fact that they allow foreign organized ECPs that might otherwise be defined as US persons. the prosecutors seem to be asserting that that these are still new york entities. i don't think any of us know new york law well enough to say one way or the other.

bbc.reporter

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News update.

I am shaking my head in confusion. Who is lying? Who is telling the truth? I reckon they might be both lying. Bitfinex is looking for ambiguity to evade the law, the New York attorney general's office is looking for minor details to charge Bitfinex.

The latest filings in the New York Attorney General’s suit against iFinex see the exchange fighting against the OAG’s claims of New York jurisdiction. The filings uploaded today claim the OAG misled the court in its July 7 filings, making New York connections seem stronger than they are.

In the filings, the OAG claims Bitfinex had operations in New York when it loaned Tethers to a New York based trading firm and opened up an account with another to facilitate the transaction. Bitfinex said this is misleading, and the borrower is in fact a foreign entity, and the New York trading firm was only utilized to complete the transaction.

In addition to this, Bitfinex claims the OAG made similar misleading claims in the so-called Whitehurst Affirmation, which contains a list of Eligible Contract Participants (ECP) showing New York logins from a professional trading firm using Bitfinex. The exchange claims each login is linked to a foreign ECP rather than New York-based companies.

Read in full https://www.theblockcrypto.com/2019/07/22/bitfinex-asserts-nyag-made-misleading-claims-of-jurisdiction-in-new-case-filings/

bbc.reporter

legendary

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Quote from: figmentofmyass on July 10, 2019, 08:49:14 PM

Quote from: bbc.reporter on July 10, 2019, 08:08:06 PM

I do not know how it might occur. However, I reckon with the cryptospace finding many ways to avoid regulations most of the time, the regulators might be very determined in taking down one big fish to make a statement.

here's an idea. maybe the NY prosecutors are just a pawn in a larger game. with this scathing filing, they have obviously established jurisdiction over bitfinex/tether. that gives them the right to compel lots and lots more documents pertinent to possible fraud, securities violations, violations of their previous settlement with the CFTC, etc etc etc.

even if NY can't shut them down or freeze their money, discovery in this case may hand the USA a federal case on a silver platter. and the USA likely can shut them down, seize servers, and freeze at least some of their money.

I reckon money laundering would certainly be one of the violations. It might be real or implied but it would be the best chance the agency has to hand this case over to the FBI.

The mainstream news media would love this storyboard, bitcoin exchange used for money laundering to fund terrorism.

squatter

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STOP SNITCHIN'

Quote from: BitHodler on July 11, 2019, 07:18:47 AM

Quote from: lucho1592 on July 11, 2019, 06:24:26 AM

Exactly. Tether works well until the regulators get to it

The get to it part is where things get a bit weird. I honestly would have expected regulators to whoop Tether like a year or two ago already. How many alarm bells needs to ring before they stand up?

They are obviously good at hiding behind lots of shell companies. Their CFO once called it "banking like criminals." Their money isn't easily found and seized, and US regulators work very slowly, making cases over the course of years. They often like to make a big seizure when they drop indictments.

BitHodler

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Quote from: gentlemand on July 11, 2019, 08:03:36 AM

One of Bitfinex's cleverest moves has been to deprogram the majority from attempting to turn it into actual dollars.

I don't think Bitfinex did that on purpose, but they won't complain about not having to buy back something that might not be backed at all by handing people over actual dollars. The distribution of Tether happens naturally.

Most of the Tether ends up being sent to exchanges such as Binance, Huobi and OKEx to buy Bitcoin and other coins with. These exchanges directly happen to be the biggest holders of Tether by far.

Once people have bought their Bitcoin those on the other side of the trade hold Tether but most likely have nothing to do with Bitfinex. This props up prices because people are always motivated to buy back Bitcoin at one point.

gentlemand

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Welt Am Draht

Quote from: BitHodler on July 11, 2019, 07:18:47 AM

The get to it part is where things get a bit weird. I honestly would have expected regulators to whoop Tether like a year or two ago already. How many alarm bells needs to ring before they stand up?

The SEC even approved the acquisition of Poloniex where Tether was allowed to be listed as fiat pair. If regulators were seriously considering to whoop Tether they would have forced Poloniex to drop Tether.

If that wasn't enough, we have people using Tether while they know it's shady but don't care because it provides a useful utility within crypto. Tether has survived so much shit that I don't see it bust at all.

I often wonder about this too. Not a great deal makes sense about it all. You'd think the second it put its head above the parapet it would've been swatted flat but there it is being as ubiquitous as ever.

I suppose unlike something like Liberty Reserve it's remained a creature entirely within crypto exchanges with no attempt to become anything else. It's primarily a parking mechanism, not payment or extraction.

One of Bitfinex's cleverest moves has been to deprogram the majority from attempting to turn it into actual dollars. That's where the legit stablecoin issuers get problematic and uptight.

cr1776

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Quote from: gentlemand on July 11, 2019, 05:24:03 AM

...
The biggest threat to Tether has always been regulators as this is ably demonstrating.

Exactly.

One of the main tools to combat the threat is to avoid using centralized entities that can be coerced by a government somewhere as this illustrates perfectly. All of these centralized entities are either scams or are open to coercion by governments somewhere. So in the long term very few (if any) are going to be safe.

At some point, some time, somewhere, someone will end up forcing each of the entities to bend to their wills. Or we will find that it was a scam from the start.

BitHodler

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Quote from: lucho1592 on July 11, 2019, 06:24:26 AM

Exactly. Tether works well until the regulators get to it

The get to it part is where things get a bit weird. I honestly would have expected regulators to whoop Tether like a year or two ago already. How many alarm bells needs to ring before they stand up?

The SEC even approved the acquisition of Poloniex where Tether was allowed to be listed as fiat pair. If regulators were seriously considering to whoop Tether they would have forced Poloniex to drop Tether.

If that wasn't enough, we have people using Tether while they know it's shady but don't care because it provides a useful utility within crypto. Tether has survived so much shit that I don't see it bust at all.

lucho1592

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Quote from: gentlemand on July 11, 2019, 05:24:03 AM

Tether is now several years old. You can't keep something like that up for this long without cracks showing at some point. The simplest explanation for this not happening is that Tether operates how they claim to operate.

The biggest threat to Tether has always been regulators as this is ably demonstrating.

Exactly. Tether works well until the regulators get to it

gentlemand

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Welt Am Draht

Quote from: bbc.reporter on July 09, 2019, 09:26:05 PM

But if Tether indeed “loaned” tethers to investors, it suggests the enormous volumes of tethers that have attended almost every recent Bitcoin price surge represent not real dollars but debt—meaning tethers have, effectively, been minted out of thin air.[/glow][/i]

Tether is now several years old. You can't keep something like that up for this long without cracks showing at some point. The simplest explanation for this not happening is that Tether operates how they claim to operate.

The biggest threat to Tether has always been regulators as this is ably demonstrating.

figmentofmyass

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Quote from: bbc.reporter on July 10, 2019, 08:08:06 PM

I do not know how it might occur. However, I reckon with the cryptospace finding many ways to avoid regulations most of the time, the regulators might be very determined in taking down one big fish to make a statement.

here's an idea. maybe the NY prosecutors are just a pawn in a larger game. with this scathing filing, they have obviously established jurisdiction over bitfinex/tether. that gives them the right to compel lots and lots more documents pertinent to possible fraud, securities violations, violations of their previous settlement with the CFTC, etc etc etc.

even if NY can't shut them down or freeze their money, discovery in this case may hand the USA a federal case on a silver platter. and the USA likely can shut them down, seize servers, and freeze at least some of their money.

bbc.reporter

legendary

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Quote from: figmentofmyass on July 10, 2019, 12:55:52 AM

Quote from: bbc.reporter on July 09, 2019, 09:26:05 PM

I speculate that this might end USDT and it might also end the bull market.

the AG's response was truly scathing and tether obviously violated NY laws......but i still don't understand what exactly the state of NY can/will do about it. the original court order was to stop bitfinex from raiding tether's reserves and to compel documents pertinent to their investigation.

so let's say they prove their case in court about lawbreaking in NY. what happens then? i've seen the feds take exchanges/brokers down before but never the state of NY....

I do not know how it might occur. However, I reckon with the cryptospace finding many ways to avoid regulations most of the time, the regulators might be very determined in taking down one big fish to make a statement.

Vishnu.Reang

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I am not supporting the Attorney General of New York in any part. But Tether should be more transparent about its assets. They claim that every coin is backed one-to-one against USD or equivalent assets. But then they are saying that some of the backup is made of Bitcoin. How can a volatile asset such as Bitcoin be used to backup a stablecoin?

figmentofmyass

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Quote from: bbc.reporter on July 09, 2019, 09:26:05 PM

I speculate that this might end USDT and it might also end the bull market.

the AG's response was truly scathing and tether obviously violated NY laws......but i still don't understand what exactly the state of NY can/will do about it. the original court order was to stop bitfinex from raiding tether's reserves and to compel documents pertinent to their investigation.

so let's say they prove their case in court about lawbreaking in NY. what happens then? i've seen the feds take exchanges/brokers down before but never the state of NY....

bbc.reporter

legendary

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News update.

It appears that Bitfinex might have broken some laws and regulations in the state of New York. The New York attorney general's office were given until July 8 to present a response after Bitfinex requested for a dismissal. They did and they appear very angry.

I speculate that this might end USDT and it might also end the bull market.

What the NYAG provided yesterday is comprehensive. Exhibits included in the latest filing appear to show that Bitfinex and Tether allowed New York investors—including the high profile Galaxy Digital CEO Mike Novogratz—to trade and redeem tethers until “early 2019,” when the investigation itself was well under way. (There was no immediate response from Galaxy Digital.) Tether and Bitfinex also allegedly opened accounts at several New York banks, housed most of their senior executives in the city, and engaged New York based accounting firms for audits.

Worse, the document alleges that the companies went to extraordinary lengths to accomodate their large New York investors, who apparently made up a considerable portion of the companies’ wealthiest customers. “In fact,” alleges the NYAG, Bitfinex and Tether assisted certain traders in “establishing foreign shell entities to become the nominal account holders—a work-around of Respondents’ purported ‘ban.’”

More damning is the allegation that the companies “loaned tethers to a New York trading firm.” As we reported last month, large “whales” can purchase high volumes of tethers directly, communicating their needs days in advance. Tether then creates these tethers, which it claims it only disperses once wire payments for each coin have come through. But if Tether indeed “loaned” tethers to investors, it suggests the enormous volumes of tethers that have attended almost every recent Bitcoin price surge represent not real dollars but debt—meaning tethers have, effectively, been minted out of thin air.

Read in full https://decrypt.co/7795/investigators-tether-loaned-usdt-to-investors-illegally-traded-in-new-york-ran-an-unregistered-securities-offering

NYAG response documents https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=/_PLUS_iqIuzGOBBoAaaiknE4Ag==

https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=5zXI_PLUS_H3eM0AalVVQRiqZag==

bbc.reporter

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News update.

Bitfinex has begun paying their loan to Tether. I reckon what the New York attorney general's office should do is more gross overreach and find the money processor and its bank partners that held Bitfinex users' funds hehehe.

Bitfinex is pleased to announce that on July 1, 2019, it repaid $100,000,000 of the outstanding loan facility to Tether. Bitfinex made this payment in fiat wired to Tether’s bank account. This amount was not yet due to be paid to Tether under the facility, but Bitfinex has made the prepayment based upon its financial position at the end of the second quarter of 2019.

Also on July 1st, Bitfinex fully prepaid all interest accrued under the loan facility to Tether up to the end of day on June 30, 2019, also in fiat.

Source https://www.bitfinex.com/posts/394

Topic: [2019-05-21] Bitfinex Argues Why Judge Should Dismiss NYAG Case in Latest Case - page 2. (Read 673 times)