The New York attorney general is pressuring Bitfinex and Tether to comply with a financial disclosure order that has remained unanswered for 17 months. John Castiglione, senior counsel for the attorn
The New York attorney general is pressuring Bitfinex and Tether to comply with a financial disclosure order that has remained unanswered for 17 months.
John Castiglione, senior counsel for the attorney general's office, filed a letter before Thursday's hearing demanding both companies submit detailed financial records within 60 days.
"As of this filing, the 354 Order has been in place for seventeen months," Castiglione wrote. "In that time, Respondents have produced 'jurisdictional' documents but failed to produce the core information called for in the Order. The delays must stop, and Respondents should be directed to comply promptly."
The dispute began in April 2019 when the attorney general claimed Bitfinex had lost nearly $1 billion in customer funds. Regulators have since sought detailed financial information to assess whether Tether, which operates alongside Bitfinex, maintained adequate reserves backing its stablecoin.
Charles Michael, the attorney representing Bitfinex, disputed both the scope of the disclosure order and the attorney general's push to extend an injunction barring Tether from sending funds to Bitfinex for three additional months. Michael contended the order cast too wide a net and said meaningful progress required narrowing its scope.
He grounded his defense in market behavior. "The allegedly concealed facts have been out in the open for 17 months, during which consumers have been free to redeem their tethers without restriction. Instead, they have chosen to buy, with tethers' market cap growing six-fold (to over $14 billion)."
This growth demonstrated market confidence in the dollar peg, Michael argued. The injunction had become unnecessary.
When regulators originally issued the injunction, the Bitfinex loan represented more than 25% of Tether's reserves. "Thanks to Bitfinex's repayments and tethers' growth, the balance now is less than 4% of tethers' backing," Michael wrote. "Consumers are well protected today, and do not need OAG's injunction."
He pointed to another metric: Tether's assets exceed the total amount of USDT in circulation by $160 million. This buffer signaled the stablecoin's financial strength.
State Supreme Court Justice Joel Cohen set the hearing for Thursday, September 17. The attorney general's office had lodged a complaint a week prior, stating that neither Bitfinex nor Tether had provided the requested documents.
