Tether Ltd. Restricted from Using Its Reserves By NYAG

New York Supreme Court Judge Joel M. Cohen has ordered digital asset exchange Bitfinex and Tether Ltd. to submit documentation regarding the issuance of a loan and a line of credit.

Tether Ltd., the issuer of the world’s most dominant stablecoin, USDT, had reportedly extended a line of credit to Bitfinex so that the exchange operator could maintain its business operations - after losing $850 million. As reported, the funds were being managed by Crypto Capital Corp., a Panama-based payments processing service provider. However, Crypto Capital has claimed its funds (under management) were seized by authorities in Portugal, Poland, and the US.

In April 2019, Crypto Capital’s managers, Ravid Yosef and Reginald Fowler, were indicted by the US Department of Justice (DoJ) for allegedly offering illicit banking services to various crypto-related firms.

“Legitimate Law Enforcement Concerns” Should Be Addressed

Last week, a preliminary hearing on the matter had been held in New York City and an opinion released on Thursday (May 16th, 2019) had ordered Tether’s management to stop loaning USDT reserves (or other assets) to Bitfinex.

At present, the New York Attorney General (NYAG) is conducting an investigation into the business operations of IFinex, Inc., the parent company of both Bitfinex and Tether, Ltd. Commenting on the matter, Judge Cohen remarked: 

The Court finds that the preliminary injunction should be tailored to address OAG’s legitimate law enforcement concerns while not unnecessarily interfering with Respondents’ legitimate business activities.

Notably, Judge Cohen has ordered Tether’s management to not loan any type of asset to Bitfinex or other parties that may be working with the exchange. However, Tether may continue to conduct normal business activities, which may also involve working with Bitfinex.

The OAG has also ordered that Tether not distribute any assets from its reserves to its employees or any other third party. Tether’s management may, however, pay its employees for any work done that is related to the company’s day-to-day, or normal, business operations.

Bitfinex To “Vigorously Defend Any Action” By NYAG

As noted in court papers, the injunction will expire in 90 days, but the OAG may file a petition in order to extend the deadline. Court documents also state that neither Bitfinex nor Tether’s management be allowed to make any changes to the loan documents that the OAG has requested.

In response to the Judge’s orders, Bitfinex stated:

We believe that the court’s decision today leaves no doubt that both Tether and Bitfinex are entitled to run their businesses in the ordinary course, even during the short period when this now narrowed preliminary injunction is in place.

Bitfinex’s management also believes the OAG acted in “bad faith” as it overlooked the exchange’s “previous historical, and voluntary cooperation with them.”

The exchange further noted:

We will vigorously defend against any action by the New York Attorney General’s office, and we remain committed, as ever, to protecting our customers, our business, and our community against their meritless claims.

Crypto-Powered Social Media Platform Voice Announces Beta

  • EOS creator Block.One announced the beta launch for their blockchain-based social media platform Voice.
  • Voice will allow users to earn Voice Tokens to further promote their content. 

Block.one, the company behind the EOSIO software, announced the beta launch date for its new social media platform Voice. 

According to an official update published Dec. 5, the beta for Voice will launch on Feb. 14, 2020. First announced in June, Voice seeks to differentiate itself from the rest of social media platforms by relying upon EOS and blockchain. 

The official update reads, 

Voice: a blockchain-powered social network that rewires the formula in users’ favor—cutting out the opaque one-sided data auctioneering, eliminating the hidden algorithms, and cycling value back into users’ hands in the form of the Voice Token.

Users earn Voice Tokens by engaging on the platform, which the post refers to as “being you, and expressing your voice.” According to the update, users cash in on Voice Tokens in order to draw greater attention to their content, thereby creating a network where “what’s good for the platform is also good for you.”

Voice claims that “tens of thousands” of users have already registered for the beta and that the creators are working with “legislators and regulators” ahead of the launch. 

Featured Image Credit: Photo via Pixabay.com