The New York Attorney General cannot bring the full force of its court order against cryptocurrency exchange Bitfinex and stablecoin Tether (USDT), cryptocurrency news media outlet CoinDesk reported, quoting a judge on May 6.
Following submission of a refute from lawyers representing the co-defendants, New York Supreme Court judge Joel M. Cohen decided the parties should try to resolve their dispute and submit a refined argument.
The Attorney General had accused Bitfinex of losing control of $850 million under suspicious circumstances, subsequently using sister company Tether’s reserves to temporarily fill the gap.
“What I would suggest you both do is meet and talk about it, you seem like a reasonable group, in let’s say a week either with a single or proposed revision that accomplishes what we’re trying to accomplish here, and if you can’t, with individual proposals,” CoinDesk quoted Cohen as saying Monday.
Both companies deny any wrongdoing, this week heavily criticizing New York authorities for the manner in which they raised their complaint.
As Cointelegraph reported, when the news broke the week of April 24, cryptocurrency markets suffered a flash crash before quickly rebounding.
Cohen, too, took issue with the handling of accusations on the part of Attorney General.
“The preliminary injunction that we have right now is vague, open-ended and not sufficiently tailored to precisely what the AG has shown will cause imminent harm,” he said. Cohen added:
“I think it’s both amorphous and endless.”
The United States, meanwhile, has also charged two figures reportedly associated with Panama-based Crypto Capital Corp., the entity which received the $850 million from Bitfinex, with crimes including bank fraud and acting as an unlicensed money transmitter.