Analysis of December NYAG and Tether Filings

Disclaimer: I am not a lawyer, this is not legal advice or financial advice or life advice or medical advice or romance advice. Especially not romance.

So this is more than a little bit delayed, but better late than never I figure. You can see the original threads that I am going to be reviewing for this analysis here: NYAG and here: Tether.

The fundamental tension between the NYAG has become less a dispute about facts and more frequently a dispute about service, jurisdiction, precedents, and language. Tether especially was much more creative in this filing than previous ones.

Let’s start by outlining the broad strokes of the NYAG argument. Their primary thrust seems to be that Tether’s claim of improper service is invalid, due to existing precedence and their failure to bring it up in an earlier motion. They also find themselves frustrated by the lack of documents that have been provided by the merry men of Digfinex.

Listen if I am going to be blunt I think all of this posturing around jurisdiction is a load of shit. The Block reported [paywalled] that it was relatively easy for a NY resident who was moderately comfortable with lying to get an account there. Now based on the New Yorkers I have seen on the national stage recently I have reason to believe at least some New York residents are comfortable lying. Also it appears that the requirements for Martin Act jurisdiction are relatively light and we also know that an accounting firm they hired, a PR firm they hired, were also in New York. Oh also they helped onboard a New York based trading outfit and loaned them Tethers. Now you can argue that the Martin Act provides too much jurisdiction, but if that is the thrust of your argument you’re going to struggle.

Now looking more in detail at the Tether response we see some excitement from their lawyers for once. One of their primary thrusts seems to be that they were improperly served, and thus everything from then is bunk. It really comes down to whether serving the outside counsel of Bitfinex who was communicating with NYAG was appropriate or not. I am not qualified to assess the law, but it seems to me that they are unlikely to win this service argument.

The second thrust of their argument is jurisdictional. Namely the New Yorkers we worked with either were technically international or we did not know they were New Yorkers. This argument would hold a little more impact if they did you know anything except asking a single question to determine if someone was from New York.

Then they try to argue that Tether is not a security or a commodity and thus not subject to Martin Act. This is their most creative argument, but it seems the reach of the Martin act will still bring them to heel here.

Overall, my assessment of these two responses together is that Tether and Bitfinex are in a pickle and are taking steps to lengthen the proceedings and win in the court of public opinion.

Originally published at http://bennettftomlin.com on February 13, 2020.