cointelegraph.com
The Appellate Division of the New York Supreme Court has ruled that Bitfinex can hold on to documents pertaining to the alleged cover-up of an $850 million loss on the Bitfinex trading platform.
Ongoing case
In a Sept. 24 court order, appellate court justices David Friedman, Peter Tom, Troy Webber, Ellen Gesmer and Jeffrey Oing moved to stop a previous ruling by New York Supreme Court Judge Joel Cohen that required BitFinex to produce documents and information related to the $850 million loss on the exchange.
As Cointelegraph reported in April, the New York Attorney General’s office (NYAG) filed a complaint against parent company iFinex, Bitfinex and affiliated stablecoin issuer Tether alleging that the companies defrauded New York investors by covering up an $850 million loss on the Bitfinex trading platform. Attorney General Letitia James wrote at the time:
“Our investigation has determined that the operators of the ‘Bitfinex’ trading platform, who also control the ‘tether’ virtual currency, have engaged in a cover-up to hide the apparent loss of $850 million dollars of co-mingled client and corporate funds.”
Cointelegraph further reported that the Attorney General revealed that her office obtained a court filing which alleged that the companies were in violation of New York law and that Bitfinex never revealed the loss to investors. The filings claimed that Tether engaged in a series of corporate transactions in which Bitfinex got access to up to $900 million of Tether’s cash reserves and used the funds to hide losses and inability to handle clients’ withdrawals.