iFinex Inc., parent company of stablecoin operator Tether and the Bitfinex exchange, has produced a “substantial volume” of documents to support its case against New York Attorney General Letitia James. The outcome of the case could have a huge impact on digital asset markets, with Tether regarded as the asset that backs up much of BTC’s (and other popular assets) price.
It will now be another 30 days before the Office of the Attorney-General (OAG) makes a decision whether to continue with further proceedings, or issue a final status update.
Charles Michael, partner at law firm Steptoe specializing in securities enforcement, confirmed in a letter to Justice Joel M. Cohen that respondents had “largely completed” production of the documents required for a scheduled January 15 hearing. However, he noted that some “supplemental agreed-upon items that need to be completed,” suggesting iFinex was still holding some information important to the matter.Bitfinex/Tether in scramble mode. pic.twitter.com/m2Hv0zmmJd — Bitcoin Australia (@BitcoinSV_AUS) January 20, 2021
The 30-day period, during which parties agreed to maintain Tether’s current status quo, is for iFinex to produce any remaining materials and for OAG to review all documents, and discuss what should happen next.
The result is likely to be a ruling that imposes penalties on iFinex and Tether (the company that oversees the USDT asset) and/or demands they become more transparent in their future operations. A large complaint about Tether among market participants is the opaque nature of its governance, and exactly what assets “back” its value.
Tether’s place in the digital asset industry
Tether (the asset) or USDT is a blockchain-based digital asset “stablecoin,” with the value of each unit nominally backed by real-world U.S. dollars and other assets. It is the primary counterparty to BTC trades on several popular cryptocurrency exchanges, including Bitfinex, and a...