NY Attorney General has Jurisdiction Over Bitfinex Probe: Court

In the ongoing legal battle between New York Attorney General’s (NYAG) office and iFinex subsidiaries, the presiding judge has ruled in favor of the prosecutor, in response to the defendants’ lack of jurisdiction claims.
According to the Monday’s ruling, Bitfinex and Tether are obligated to hand over the necessary documents to the New York prosecutor over the investigation of a $700 million line-of-credit by the stablecoin issuer to the crypto exchange.

The ruling came amid the plea by the defendants’ lawyers as they questioned on the jurisdictions of NYAG over the business of the British Virgin Islands-registered companies.
“The Court disagrees with the Petitioner that it is (or can be) premature for the Court to determine whether it has jurisdiction to issue orders impacting the rights of Respondents in this proceeding,” New York Supreme Court Judge Joel M. Cohen stated.
“That said, the Court finds based on the evidence and applicable law that it has jurisdiction – and a clear statutory mandate – to adjudicate this matter. Accordingly, Respondents’ motion is denied, and the temporary stay of the investigation is dissolved.”
A tainted loan to cover up hundreds of millions in losses
The investigation on the crypto companies started in April when the NYAG’s office first alleged that the cryptocurrency exchange covered up an Crypto Capital. In the process, Bitfinex turned to Tether to obtain a line-of-credit of $700 million. The initiation of injection in May froze the possibility of any further lending as another $200 million were about to flow from Tether to Bitfinex.
The fresh ruling provided iFininex subsidiaries another 90 days to turn over the documents to the New York prosecutor. The injunction would expire on October 14.
Meanwhile, the lawyers of the defendants claimed that they spent $500,000 and appointed 60 lawyers to find documents asked for by the NYAG’s office. In response to that, the NYAG revealed the nature of the demanded documents to the court and stated that and should be at the “fingertips” of the companies.