Bitfinex Exchange Under Attack

Judy Rubio

Bitfinex cryptocurrency exchange wrote about a lawsuit filed against it in connection with the issue of the Tether stablecoin. Platform declared that it has no reason and pursues selfish goals.

Representatives of the cryptocurrency exchange wrote: “On November 22, a class action lawsuit was filed against Bitfinex and the USDT token in the state of Washington. It is based on another document that was filed with the New York State Judiciary a month earlier. The lawsuit has many shortcomings of its predecessor. In both cases, the plaintiffs take an unfounded position”.

Official Bitfinex Comments

The cryptocurrency exchange focused on the fact that it will not make a deal with the other side, the company is ready for litigation. Its representatives noted: “We expected that many would try to use our service and stablecoin to make money on this. We will not make uncomfortable compromises and settlement methods”.

The crypto-exchange noted that it never used the USDT for the purpose of manipulation: “Each Tether token has a dollar security. Their emission and trade are in accordance with the demand in the market, it was not intended to control the value of crypto assets”.

Bitfinex CTO Paolo Ardoino tweeted: “There is no doubt that we will be able to defeat this too.”

Last month, investors filed a class action lawsuit against iFinex Inc and its management team. The company was accused of violating US commodity exchange legislation, money laundering, the RICO law, market manipulation through the issue of Tether.

The amount of the claim is 1.4 trillion dollars. The co-defendants are Jean-Louis van der Velde, Philippe Porter, Giancarlo Devasini, as well as Global Trade Solutions and Crypto Capital. On the accounts of the last company, Bitfinex money worth $ 850 million was frozen until these times. As a result, the cryptocurrency exchange took a loan from the reserves of USDT, which was the reason for filing a lawsuit in New York jurisprudence.

Lawyers Kyle Rocher and Val Freudman are in charge of the proceedings. The article “Chinese authorities against crypto exchanges” talks about the difficulties of doing business in the Middle Kingdom.

Accusations Against Bitfinex

 The New York State Prosecutor’s Office filed accusations to Bitfinex that, after a loss of $ 850 million, it did not report loss coverage from Tether’s affiliate issuer. The exchange denies the data directly. But even the release of this news led to the collapse of the bitcoin exchange rate. 

IFinex Inc is the operator of Bitfinex and Tether. It was ordered to stop violating New York law. This statement was made by Attorney General Leticia James.

The prosecutor said that during the investigation it was found that iFinex conducted operations to conceal the loss of 0.85 billion dollars, which belonged not only to the exchange, but also to its customers. This is the main reason for the difficulties with the withdrawal of money.

Ms. James stated: “The State of New York holds events that oblige cryptocurrency businesses to strictly follow US law. We will continue to protect investors and their interests in case of fraud on the part of trading and other platforms”.

According to prosecutors, Bitfinex sent $ 850 million of its and client money to the Panamanian Crypto Capital. The company froze the money not only of this, but also of other cryptocurrency exchanges, including the bankrupt QuadrigaCX platform.

Tether reserves were used to cover the deficit, but exchange users did not receive information about this. To date, the prosecutor's office found that for this purpose USDT was taken from the USDT.

In 2018, Bitfinex announced that cryptocurrency exchange services would become unavailable to residents of the state of New York.

In the development of the lawsuit participated Brian Whitehurst, Attorney General of New York. He stated: “The Prosecutor General’s Office believes that Bitfinex continues to make deposits for individual investors from our state, trade and withdraw funds in cryptocurrencies. In addition, the exchange is involved in other activities”.

Core of the Court Order

Regarding to a court decision, iFinex executives at various levels and employees, agents, representatives and other affiliates should cease to gain access and qualify for money held in USDT reserves. In addition, they will not be able to make changes to the documents for these events.

The court order emphasizes that it does not mean that the US authorities plan to create obstacles for the subsequent trading activities of Bitfinex and the payment of USDT tokens.

Before that, representatives of Tether and Bitfinex notified the prosecutor's office that the reason for the deduction of Crypto Capital funds was their confiscation by the American, Polish and Portuguese authorities. But Bitfinex does not share this version.

Bitfinex Reaction

Representatives of the cryptocurrency exchange stated that before the court order there were no preliminary discussions with the platform and it was adopted without any warning. Bitfinex emphasizes that information about the loss of $ 850 million and other information is false.

A representative of the exchange stated: “We were informed that $ 850 million was not lost, but that they were confiscated and the money was controlled by the authorities. We are doing our best to bring them back. The New York State Attorney General’s office is deliberately hindering us, as a result, Bitfinex customers are experiencing a negative effect. ”

As you can see, the Bitfinex exchange is under certain pressure. On the other hand, the platform makes a lot of efforts to triumph in court. Therefore, there is no reason to believe that it will have serious problems. If you want to engage in trading, you can