A New York judge has ordered crypto exchange Bitfinex to turn over documents pertaining to the exchange’s alleged cover-up of an $850 million loss and a subsequent loan from stablecoin issuer Tether – but not immediately.
New York Supreme Court judge Joel M. Cohen said during a Monday afternoon hearing that the preliminary injunction secured by the New York Attorney General’s office (NYAG) at the end of April should remain in effect, at least in part, though he took issue with the scope.
Attorneys for both plaintiff NYAG and respondents Bitfinex and Tether have a week to hammer out either a joint or individual proposals for what the scope of the injunction should be, which the judge will rule on.
“What I would suggest you both do is meet and talk about it, you seem like a reasonable group, in let’s say a week either with a single or proposed revision that accomplishes what we’re trying to accomplish here, and if you can’t, with individual proposals.”
That being said, he added that he thinks “the preliminary injunction that we have right now is vague, open-ended and not sufficiently tailored to precisely what the AG has shown will cause imminent harm. I think it’s both amorphous and endless.”
The injunction in question was filed on April 25, when the NYAG’s office revealed that the exchange had borrowed nearly $1 billion from Tether’s reserves after losing access to $850 million held by a payment processor, Crypto Capital (it was later revealed by federal prosecutors that Crypto Capital’s operators had been indicted for bank fraud, and its bank accounts were frozen).