United States District Court judge for the Southern District of New York, Katherine Polk Failla, ordered Tether to prove 1-to-1 support for its eponymous stablecoin, Tether (USDT). The company is required to provide “ledgers, balance sheets, income statements, cash flow statements, and profit and loss statements” and other documents to the court.
The injunction was published on September 20 as part of a case that began in 2019 – the first complaint by a group of investors against iFinex’s parent company, Tether and Bitfinex, alleging that the company manipulated the crypto market by issuing unsecured Tether with an intent. to drive up the price of cryptocurrencies such as Bitcoin (BTC).
Judge Polk Failla rejected iFinex’s requests to block the injunction on the grounds that the company had previously produced the documents “enough enough” for the Commodity Futures Trading Commission and the New York Attorney General. She found that the plaintiffs’ demand for “undoubtedly important” documents is well established, as they “seem to go to one of the main allegations of the plaintiffs”.
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Earlier, in September 2021, Judge Polk Failla dismissed the plaintiffs’ claims against iFinex under the Extortion Affected and Corrupt Organizations Act and allegations of extortion or the use of extortion proceeds for investment.
In February 2021, in another case settled with the New York Attorney General’s office, iFinex agreed to pay $18.5 million in damages to New York and to submit to periodic reporting of their reserves. , in addition to discontinuing services to customers in the state. The settlement came after a 22-month investigation into whether the company had tried to cover up its losses — reportedly worth $850 million — by misrepresenting the extent to which its USDT reserves were backed by fiat collateral.