The court upheld the ban on using Tether assets for investment activities Bitfinex

The New York State Supreme Court upheld restrictions on the use of Tether Limited’s reserves for the investment activities of other companies, in particular the Bitfinex cryptocurrency exchange. This is stated in the relevant order on the website of the court.

According to the court’s decision, Bitfinex cannot use Tether’s assets for lending or for other needs, “unless the usual business procedures require it.” Tether is also forbidden to provide funds from its reserves to employees, unless it is a question of salaries and standard payments.

In addition, the court upheld the 90-day injunction requested by the State Attorney General's Office (NYAG) and which can be extended.

Earlier, representatives of iFinex Inc., which is the operator of Bitfinex Bitcoin Exchange and parent company Tether Limited, asked the court to reduce this period from 90 to 45 days.

At the same time, the ruling states that Tether can invest its reserves in the ordinary course of business. The company stated at the previous court session that it used its reserves for investment purposes, although it is unclear what kind of investments are being discussed.

Representatives of Bitfinex took this decision, however, very positively.

NY court grants Bitfinex's motion to modify injunction: https://t.co/b8TY0QBvYs

– Bitfinex (@bitfinex) May 16, 2019

The exchange said that the initial ban of the Prosecutor General’s Office was “vague, excessive and not limited in time”, while the latest court decision allows Bitfinex and Tether to continue their normal commercial activities.

“The decision is our victory in protecting our business from the Attorney General of New York,” said Bitfinex in a statement.

Earlier, the exchange had already challenged the jurisdiction of the prosecutor’s office, and now it again called the actions of NYAG “unscrupulous”, adding that it would protect its business from “baseless claims”.

Recall that in late April, the New York Prosecutor General’s Office charged Bitfinex with the fact that, having suffered a loss of $ 850 million, it concealed this fact, using the funds of its affiliate issuer steyblekoina Tether to cover the damage.

Against this background, users began to massively withdraw funds from Bitfinex. So, according to BitMEX analysts, in just five days the outflow of funds from Bitfinex amounted to almost $ 600 million.

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