Recently obtained court documents reveal that Tether, the firm behind the popular USDT stablecoin and that shares management with crypto exchange Bitfinex, used some of its reserves to invest in bitcoin and ‘other assets’.

According to documents obtained by The Block, Bitfinex’s attorney David Miller revealed the company invested in instruments that weren’t cash or cash equivalents. He stated:

Prior to the April 24th order … Tether actually did invest in instruments beyond cash and cash equivalents, including bitcoin, they bought bitcoin.

The April 24 order Miller referred to was issued by the New York Attorney General, which alleged Bitfinex and Tether used client funds and funds borrowed from Tether to ‘cover-up’ an $850 million hole of seized money.

Bitfinex’s CEO, Jean Louis van der Velde, responded to the lawsuit claiming it was “filled with inaccuracies and false assertions.” The firm claimed there was “no ongoing fraud” and “no victims” involved. Notably, earlier this year Tether diluted its USD reserve claims to include “traditional currency and cash equivalents,” as well as “other assets and receivables from loans made by Tether to third parties.”

In the hearing, Bitfinex’s attorney argued the NYAG wanted to restrict Tether’s investments to cash and cash equivalents because they “don’t like” some of the investments it has made. Per Miller, the regulator is acting beyond its jurisdiction.

Questioning Tether, New York Supreme Court Judge Joel M. Cohen stated:

Tether sounded to me like sort of the calm in the storm of cryptocurrency trading. And so if Tether is backed by bitcoin, how is that consistent? If some of your assets are in a volatile currency that Tether is supposed to somehow modulate, that seems like it’s playing into what they are saying.

The attorney clarified that Tether invested a “small amount” into BTC, noting its disclosures made it clear the firm was investing in other assets. On social media, crypto entrepreneur Alistair Milne revealed an analysis of Tether’s wallet shows the company has 0.075 BTC to “fund transactions on the Omni network.”

Most USDT tokens in circulation work using the Omni network, which is built on top of the Bitcoin blockchain. Following the recent court hearing, The Block reports Tether was allowed to invest its reserves as part of its operations.

The judge, however, ordered Bitfinex and Tether to “restrain access to credit lines on USD reserves held by Tether,” to not distribute dividends from funds Tether has received to Bitfinex executives and agents, and not to “tamper with documents that NYAG originally requested.”

Since the alleged $850 million cover-up was revealed, Bitfinex has already managed to raise $1 billion through an initial exchange offering (IEO) for its LEO tokens, which are already trading on the exchange. Bitfinex has also recently launched a new IEO platform called Tokniex.