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Bitfinex does not need to continue turning over documents to the New York Attorney General’s office (OAG) – at least, for now.
According to a court order dated Tuesday, the Appellate Division of the Supreme Court has stayed a previous ruling by New York Supreme Court Judge Joel Cohen. Cohen ruled in August that Tether and its affiliated entities must produce documents about a $900 million loan to Bitfinex, the exchange that Tether shares leadership and shareholders with.
According to the order, which listed appellate court justices David Friedman, Peter Tom, Troy Webber, Ellen Gesmer and Jeffrey Oing, the respondents moved to stay an order to turn over documents about the loan.
The judges wrote:
“It is ordered that the motion is granted on condition the appeal is perfected on or before November 4, 2019 for the January 2020 Term.”
The appeal will likely be fully briefed by sometime in December, with arguments not occurring before next year.
Bitfinex, its parent company iFinex, its sister firm Tether and other affiliated entities are fighting the New York Attorney General’s office, which alleged in April that the exchange covered up the loss of $850 million held by a payment processor by borrowing from Tether’s stablecoin reserves.
The New York regulator asked Bitfinex to turn over a number of documents pertaining to this alleged cover-up, which included a number of loans that Tether provided to Bitfinex to help the exchange process customer withdrawals and other transactions.
Judge Cohen ruled last month that Bitfinex must turn over the documents, saying the NYAG’s office had jurisdiction over the exchange and the document production should proceed.
Attorneys for Bitfinex immediately appealed the decision.
In a statement Tuesday, Stuart Hoegner, general counsel to Bitfinex and Tether, said “We are gratified by the panel’s decision and we look forward to addressing the substantive issues before the appellate court.”
After this article was published, an NYAG spokesperson told CoinDesk that, “The injunction that prohibits the movement of money between Tether and Bitfinex is still in place, that has not changed. We look forward to making our case in court as we seek to have Judge Cohen’s decision upheld and continue our investigation.”
UPDATE (Sept. 24, 2019, 20:05 UTC): This article has been updated with a comment from the New York Attorney General’s office.