The ongoing case between iFinex and New York Attorney General (NYAG) has taken another turn as the judge delayed the date to decide the fate of the trial.
This came after the attorney of Bitfinex and Tether filed a motion for dismissal of the case, alleging that the NYAG’s office did not serve mandatory papers to Bitfinex and Tether.
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 until the final ruling is made available.
“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 NYAG’s office filed in April to uncover more information about the loss, the alleged cover-up and the line of credit that Tether opened. Cohen initially asked the parties to negotiate a narrower injunction, before ruling that Bitfinex and Tether can resume normal operations, though prohibiting any more fund transfers from Tether to Bitfinex.
The NYAG and iFinex have been locked in a legal squabble since April, when the office brought an investigation into alleged Martin Act violations, claiming iFinex co-mingled funds with its sister company, Tether, to cover losses totaling $850 million. The exchange insists the NYAG lacks jurisdiction in the case since it does not serve New York customers according to its terms of service.
In addition to this, there are also questions as to what category Tether falls under. If the asset is discerned to be a commodity, security or foreign currency, this could grant the NYAG subject matter jurisdiction over the case, which is distinguished from personal jurisdiction that would come from serving a New York customer base. Both types of jurisdiction would empower the NYAG to enforce Bitfinex’s cooperation in its investigation under the Martin Act. iFinex’s counsel claimed Tether is none of these things, though stopped short of defining what class the asset falls under.