Crypto Exchange Bitfinex Wins More Time to Present Documents

(Bloomberg) — The crypto exchange Bitfinex won additional time to provide documents in a case filed last year by New York Attorney General Letitia James that claims that it hid the loss of comingled client and corporate funds.

In a virtual ruling Thursday, New York state Judge Joel M. Cohen extended an injunction by 90 days and directed a special referee to set a schedule to provide documents requested. Cohen said he’d defer to the referee in determining which documents related to the cryptocurrency Tether, which is affiliated with Bitfinex and related companies, are pertinent to the case. He also hinted that he may not extend the injunction again.

“The court doesn’t envision a long-term injunction,” Cohen said. A preliminary injunction was issued 17 months and set to expire in a few weeks.

Bitfinex and related companies are facing claims by New York that they hid the loss of more than $800 million. The companies have said the funds were deposited with a Panamanian firm called Crypto Capital Corp. and then seized by government authorities in various countries. They have said they are working to recover the money.

Much of the dispute as of late has revolved around the scope of documents that Bitfinex and related companies have to produce in relation to Tether, which serves as a conduit for trading in cryptocurrency markets globally. Since James filed the case in April 2019, Tether’s market capitalization has surged to about $15 billion from around $2.7 billion.

In July 2019, Cohen blocked Bitfinex from accessing, loaning or making any claim on Tether’s cash reserves pending James’ investigation while he consider a bid to dismiss the case.

The special referee has to notify Cohen of a set schedule for the production of the documents, he said.

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