When Bitfinex, one of the world’s largest crytocurrency exchanges, was accused by New York’s attorney general for hiding the loss of around $ 850 million in customer and corporate cash, a crucial question remained unanswered: What happened to the money?
Bitfinex argues that the funds are not missing at all. The exchange says the money was deposited with a Panamanian-based company called Crypto Capital Corp. and then seized by government authorities in the U.S., Poland and Portugal.
The wild series of events took another turn on April 30 when a grand jury revealed that Reginald Fowler, a 60-year-old Arizona entrepreneur who once had a small stake in the Minnesota Vikings of the NFL, had been indicted.
Fowler was charged with running an unlicensed money transmitting operation linked to virtual currency trading along with an Israeli woman named Ravid Yosef.
Now coming back to this month, Bitfinex won a partial block on requests for information from New York Attorney General Letitia James while seeking to dismiss a lawsuit accusing companies of hiding the loss of hundreds of millions worth of customer and corporate cash behind the cryptocurrency exchange.
New York State Supreme Court Judge Joel M. Cohen put a hold on James ‘ demands in an order posted on Wednesday, with the exception of issues relevant to whether the case can be heard in his court.
Cohen set a July 29 hearing date for both sides to appear for arguments as to whether all requests for information should be put on hold while considering the requests made by Bitfinex to reject the suit.
“This order is another victory in the ongoing defense of our businesses against the New York Attorney General’s overreach, We will continue to vigorously protect our customers and assert our rights against those making false and unsupported claims against us.”
James accused the companies behind Bitfinex and the cryptocurrency tether in April for hiding the loss in customer and corporate cash of more than $850 million. Ifinex Inc., based in Hong Kong, claimed that New York had no jurisdiction in this matter because U.S. residents were not permitted to trade on the exchange registered in the British Virgin Islands.
The litigation has affected the ability of the companies to use their funds freely, and has pushed Bitfinex to raise what it claims was $ 1 billion by issuing a new token known as Leo that debuted this week.