New York Supreme Court Dismisses Bitfinex Petition
Earlier this month, Bitfinex filed a petition with the New York Supreme Court claiming that the New York State Attorney General (NYAG) was wrongly investigating Bitfinex as New York lacks the jurisdiction to do so. This argument was based on the fact that Bitfinex claims they have never catered to customers in the state. The court was quick to overrule this and dismissed this petition, allowing the NYAG to continue the investigation, August 19, 2019.
Bitfinex Inquiry Continues
Since the petition on jurisdictional grounds has been dismissed, Bitfinex will now be looking to solidify their case with evidence, testimony, and extensive documentation.
Bitfinex claimed they never served New York residents and have actually enforced a geo-block for the state of New York. The state requires companies operating in the cryptocurrency space to gain approval from the State Department of Financial Services and obtain a BitLicense.
Bitfinex’s lawyers claim that even if the state can prove they served customers in New York, they cannot establish whether the customers were harmed by the exchange. In reality, this doesn’t matter, as if the NYAG can prove they conducted business with customers in the state, they will be fully backed by the Supreme Court to investigate the company.
Business Hardly Affected
After the news of the investigation was first announced in April 2019, it was feared that litigation of this sort could pull the market down – especially considering the market had a short term spiral to the downside when it was announced.
However, the market has recovered big time since then, surging almost 150 percent to a range high of $13,900. Bitfinex’s exchange business hasn’t suffered either, as earlier speculated by market observers.
The exchange boasts a total volume of just over $120 million with 54 percent of it coming from their BTC/USD pair.
Tether (USDT) has also seen no major backlash or long term sentiment loss as a result of this lawsuit. The market still prefers to use Tether over most other stablecoins simply because of the liquidity and mass availability on exchanges.
Long story short, Bitfinex hasn’t been rattled by this investigation and have so far managed to conduct themselves with a shield of confidence. Any solid evidence from the NYAG could turn the tides against the exchange.