Bitfinex denies claims of NY Attorney General

• The case was first brought against the crypto company in April 2019.
• The company denies any wrongdoing, says accusations ungrounded.

New York Attorney General (NYAG) accused the Hong Kong-based exchange registered in the British Virgin Islands of allowing the NY customers to use its platform to trade cryptocurrencies. However, the cryptocurrency exchange provided the court with lots of files and documents to prove that it had never illegally served New York residents.

Bitfinex and Tether’s attorney Stuart Hoegner, in the recent filing, claimed that the pieces of evidence submitted by the prosecutor were baseless and “contain a number of inaccurate and misleading assertions.”

According to Stuart Hoegner, an attorney fo Bitfinex, the prosecutor provided inaccurate pieces of evidence and based misleading assertions on them.

He further explained that those US customers who traded on the platform, were registered as Foreign Entities; thus, they fell under the definition of eligible contract participants (ECPs).

“Under Bitfinex’s and Tether’s Terms of Service, Eligible Contract Participants (“ECPs”) that transact with Bitfinex or Tether must be foreign entities. Although those foreign entities may have shareholders or personnel who reside in, or otherwise have contact with, the United States or New York, Bitfinex’s and Tether’s customers are the foreign entities themselves … Bitfinex and Tether do not transact with any New York ECPs,” the document stated.

Thus, Mike Novogratz’s Galaxy Digital has an address in NY, but it also qualifies for ECP and allowed to trade on the platform.

Bitfinex terminated services in NY as of January 2017, in accordance with the ban introduced in August 2017 that covered all US-registered entities and retail customers.

The attorney appealed to the court to dismiss the case on the provision that NYAG’s office did not serve mandatory papers to Bitfinex and Tether.

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