Tether, Bitfinex Seek Access to Funds Restricted By NYOAG

Tether and iFinex’s attorneys have asked the New York Office of the Attorney General (NYOAG) to let the former access its reserves via a letter sent to the New York County Supreme Court.

Attorneys representing Tether and iFinex, Bitfinex’s parent company, claimed that restrictions placed by the NYOAG on the former’s transactions had no basis.

The NYOAG had recently prevented tether (USDT) holders and other affiliated entities from accessing and redeeming their tokens from Tether’s reserves for at least 90 days.

NYAG Letitia James had earlier this year accused Tether and Bitfinex of committing fraud to hide massive losses sustained by the latter with funds from the former.

The NYOAG reasons that with no assurance of repayment in place, letting Bitfinex continue to draw funds from Tether opens up the significant possibility that these funds would never be recovered.

Bitfinex, on the other hand, claims that the NYOAG has neither the legal basis nor the authority to probe its business.

Tether, meanwhile, believes the NYOAG’s restrictions could have significant deleterious effects on its operations.

While Tether does not anticipate that it will suddenly become unprofitable, OAG’s language would potentially require the company to cut off salary and other ordinary course payments in any given period if, for whatever reason, there was insufficient profit,” the document reads.

Tether and iFinex attorneys have proposed a compromise where the injunction would be reduced to 45 days instead of 90. They’ve also asked that affiliated entities, which would include Bitfinex, be able to redeem their tokens within that 45-day period.