The court agreed to support the request of the New York prosecutor’s office to the Bitfinex exchange to provide documents related to the concealment of the loss of $ 850 million and the loan issued by the issuer of the stablecoin Tether, writes CoinDesk. According to the ruling, the temporary injunction against Bitfinex, issued at the end of April, will remain in force, but the claims of the prosecutor’s office should be reviewed.
Now lawyers on both sides have a week to develop a joint or individual proposal on what the interim measures should be. The judge described earlier claims of the prosecutor’s office as “vague, lengthy and not precise enough to demonstrate what harm could be caused.”.
According to the original request of the prosecutor’s office, Bitfinex and Tether had to transfer all documentation related to the financial transactions of interest to the department, as well as immediately stop any operations on further lending.
Speaking about the possibility of recognizing Tether as a security, which, among others, may be regulated by the prosecutor’s office in New York, the judge noted: “This is a borderline issue. I know these tokens are traded in the market, but how to classify them is another matter. I acknowledge that banks do not have all the dollars in possession at any given time. I also acknowledge that you are not a bank and are not subject to applicable regulatory requirements. “.
At the same time, a Bitfinex lawyer noted that USDT cannot be recognized security, since it does not satisfy at least two criteria of the Howie test. According to the prosecutor’s office, it has the right to regulate USDT, since Tether tokens are available for purchase to New Yorkers in the secondary market through the Poloniex exchange.
The judge declined to name an indicative date for the lifting of the injunction, indicating that the time frame would depend on the progress of the prosecutor’s investigation and its results..