Just because Bitfinex and Tether already settled with the New York Attorney General doesn’t mean that they are out of the woods, legal experts say.
Last Tuesday, iFinex settled a two-year-old investigation brought by the New York State Attorney General.
While the company publicly celebrates that its stablecoin and exchange can move past this moment, legal experts stated that iFinex can remain under scrutiny from other state attorneys general and the Department of Justice.
As a part of yesterday’s settlement. Tether and Bitfinex shall stop doing business with New York citizens and companies and then submit quarterly reports about their reserves. It will also pay $18.5 million, without confessing any wrongdoings.
However, New York is not the only government with the power to investigate Bitfinex and Tether.
Marc Boiron, the general counsel of dYdX, admitted that he didn’t have strong views on state prosecutors’ future plans. But he stated that future investigations could remain a possibility.
Olta Andoni, an attorney and Chicago-Kent College of Law professor, stated that even though the monetary penalty is small, there is a lot that Tether must disclose.
“I think what’s going to happen is that definitely NYAG is going to supervise this very, very closely because they still have the right and if you read the settlement you see that they have a long list of items that Tether has to abide and comply with,” she said. “Anytime, they’re not going to be compliant, they can definitely have another action.”
She also noted that the US Department of Justice could also step in to inquire about money laundering claims, noting that Tether is exchanged for Bitcoin outside the US and eventually moved back to US exchanges.
Boiron named the two most-populous states in the US; California and Texas, as they are the most likely to pursue cases against Tether, regardless of how well-behaved the firm is with regard to different disclosures.
However, there is a big catch. Texas has “put out guidance that implies that Tether is not required to be licensed to engage in its activity.” And for California, he stated that the Golden State has “not been particularly aggressive in enforcement against crypto companies relative to states like New York and Texas.”
This experience has battle-tested Tether’s legal defense. When inquired if the company was aware of any ongoing investigations against it and how it cooperated with some investigations, Tether General Counsel Stuart Hoegner said that;
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