IFinex Indictment
IFinex Indictment
IFinex Indictment
450545/2019
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/25/2019
Petit ioner.
Respondents,
in promoting the issuance. distribution. exchange,
advertisement. negotiation. purchase. investment advice
or sale of securities or commod ities in or from New
York State.
- - - - - - - - - - - -- -- - - - - - - - - - - - - - - - - - - - - - - - X
Genera l of the State of New York ("'OAG" or ··Attorney General""). and am an attorney ad milled
to practice before the courts of this State. I am familiar with the facts and circumstances or
OAG" s investi gation o f iFinex Inc .. BFXNA Inc .. BFXWW Inc. (collective ly. ··Bitfi ncx··).
Tether Ho ldings Limited, Tether Operations Limited. Tether Limited. and Tether International
Limited (collective ly, ·Tether," and together with Bitfi nex. ·' Respondents··).
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2. I submit this affirmati on. along with ex hibits. based on personal knowledge. the
examination of records and documents contai ned in the files of OAG. and in certain mailers upon
3. This affi rmation is subm itted in support of OAG ·s ex parte application for reli ef
documents. records and in formation which are materia l and necessary to O/\G·s ongo ing
investigation.
to GBL § 354 pending the compl etion of OAG "s investigation. in order to mai ntain the stat11s
quo and avo id continuing and future harm to New York investors.
Respondents
7. Respondent iFinex Inc. is incorporated in the British Virgin Islands. with onices
or operations in London, Hong Kong and Taipei. and other locations worldwide.
iFinex Inc .. and are also incorporated in the Briti sh Virgin Islands. Based on information
provided by counsel fo r Respondents. BFXNA contracts with cl ients based in the United States.
including New York. Based on in formation provided by counsel for Respondents. BFXWW
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I0. Based on in formati on prov ided to OAG by Respondents. iFi nex. 8FXNA. and
BFXWW are operated by the same small group of executi ves and employees. Together. the
entities operate an on line platform called ·'Bitfinex·· fo r exchanging and trading vi11ual currency.
For ease of reference. and unless otherwise noted, thi s Affi rmation wi ll refer to if-'inex. BFXNA.
11 . Bitfinex is not licensed by the New York Department of Financ ial Services to
12. In 20 16. BFXNA consented to entry of an Order Instituting Proceed ings with the
Commod ity Futures Tradi ng Commission. reso lving an in vest igation into BFXNA (and with to
respect activiti es prior to Jan uary 201 5, iFinex) in connect ion wi th its operation of the Bitfinex
trading platform. concerning vio lations of Sections 6(c) and 6(d) of the Commod ity Exchange
Li mited, incorporated in the British Virgin Islands, is the holding company of Tether Lim ited.
Tether Operations Lim ited and Tether International Limited. all or which are be lieved to be
processing Tether"s non-U.S. based investors. For ease of reference. and unl ess otherwise noted.
th is Affirmation will refer to Tether Holdings Limited. Tether Limited. Tether Operations
14. Tether is not licensed by the New York Department of Financ ial Services to
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15. Based on information prov ided to OAG by Respondents. the Tether entities arc
owned and operated by the same small group of executives and employees who operate Bitfi nex.
Bittinex and Tether have several dozen additional employees around the world . OAG has reason
to believe that certain of those indi viduals are. or have been. located in New York.
owned by an entity named DigFinex Inc .. whi ch is also the majority owner of ir incx .
various times in 20 17 and 20 18 both Bitfinex and Tether maintained accounts at two New York-
18. '' Virtual currencies: · also commonly referred to as ··cryptocurrcncies: · are digital
units that are used as a medium of exchange or form of di gitally-stored va lue. To date. nearly
two thousand virtual currencies have been created and are traded around the world. The most-
we lI known virtual currency is bitcoin, which is also the most widely-traded and highly va lued
virtual currency.
19. Virtual currencies are widely traded and exchanged online through various tradi ng
platforms. which often refer to themselves as "exc hanges ... These trad ing platforms perform a
function akin to traditi onal stock or commod ities exchanges by matching buyers and se llers of
virtual currency. The platforms also perform runctions akin to trad it iona l broker-dea lers. transfer
agents. or clearing firm s. and many pl atfo rms also hold client cash deposits. There are now at
least 130 different trading platform s available to exchange virtual currencies worldwide. Unlike
traditional stock and commoditi es exchanges. virtual currency trading platforms now in
operati on have not registered under state or federal securities or commodities la"vs. Nor arc there
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protections.
20. The New York Department of Financial Services has promulgated regulati ons
2 1. Bitfinex operates a virtual currency trad ing platform . Investors access the
Bitfinex trading platform and place orders through its website. avail able at www.bitfinex.com.
22. Over ninety virtual currencies are listed for trading on the Bitfi nex pl atform .
including prominent virtual currencies li ke bitcoin and ether. as well as a host or other less-
prominent and thinly-traded symbo ls. Bitfinex earns money by. among other things. charg ing
investors a fee fo r trades made on its platform . Bitfinex also prov ides users with the ability to
store their virtual currency and transfer their holdings to a different trading platform.
23. Bitfi nex is one of the relati vely few virtual currency trad ing platform s that al lows
traders to deposit and withdraw so-cal led ·'fi at.. currency. including U.S. do llars. euros. pounds.
and yen. Traders using the Bitfinex platform can deposit doll ars with Bitfinex, convert them to
virtual currency at the rates offered by Bitfinex, trade the vi rtual currency they have purchased.
convert their virtual currency holdings back into dollars, and withdraw the fu nds. It is important
that Bitfinex has suffi cient U.S. dollar deposits on hand to fill withdrawal orders submitted by
traders.
24. OAG's investigation has determined that, prior to August 201 7. Bitfinex had few
or no restricti ons on who could access their trading platfo rm. meaning that New York-based
investors were able to create accounts, fund them with U.S. dollars. convert into virtual currency.
trade, and withdraw fund s. In August 20 17. Bitfinex announced it would no longer permit U.S.-
based individual investors to access the trading pl atform. but U.S.-based business entities were
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sti ll permitted to trade. In August 20 18, Bitfinex·s ostensible exclusion of U.S.-based indi vidual
investors expanded to include all U.S.-based entiti es, except those enti ties or organizations that
mainta ined an incorporation address outside of the United States. Those in vestors are known as
Eli gible Contract Participants. or '' EC Ps:· OAG has reason to believe that several U.S. and New
25. OAG has reason to believe that Bitfinex st ill all ows New York-based indi vidual
investors to deposit, trade, and withdraw vi1tual currencies. and engage in other transactions. on
Tether
26. The primary function of Tether the company is as the issuer of a virtual currency
27. Tether is listed on at least several dozen virtual currency trading platforms around
28. Unlike most virtual currencies. the market pri ce of which flu ctuates as they are
'
exchanged on trading platforms around the world, ·'tether.. is a so-called ·'stablcco in:· a term that
is used to descri be a virtual currency that is always supposed lo have the same rea l-dollar value.
"Stablecoins·· have characteristi cs of securities and commodities. In the case of tethers. one
29. Accord ing to public statements made by Tether. one use for tethers is lo allow
traders lo qui ckl y enter and ex it positions in other virtual currencies. at a stable and pred ictable
price. Since one tether is always (supposed to be) equal to one U.S. doll ar. traders can use
tethers lo trade between different vi,tual currencies. or across different trad ing platforms. with
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30. In order to signal to the market that each tether held by investors is equa l to one
U.S. dollar. Tether has long represented that for every outstanding tether issued and trad ing in
the market, the company itself holds one U.S. dollar in reserve.
3 1. Prior lo late February 20 19, Tether represented that every outstandi ng tether was
" backed.. by. and thus should be valued at, one U.S. dollar. Tether represented to investors that
"Every tether is always backed I-to-I . by traditional currency held in our reserves. So I USDT
32. By March 4, 20 19, Tether changed its disclosure. representing that ··re Ive ry tether
is always I00% backed by our reserves, which inc lude trad itional currency and cash equ ivalents
and. from time to time. may include other assets and receivables fro m loans made by Tether to
third parties. which may include affili ated entities (collecti vely. ·reserves ' ). Every tether is also
I-to- I pegged to the dollar, so I USDT is always valued by Tether at I uso:· An arch ived copy
of Tether·s website, www.tether.to, from March 4, 20 19 is attached hereto as Ex hi bit C.
33. Tether represents to investors that any holder of tethers can redeem them from
34. Tether maintains complete contro l over the issuance of new tethers. Coun se l for
Respondents has represented to OAG that issuances of new tether occur when an investor ha s
requested to purchase tethers by depositing U.S . dollars with Tether the company. or by
depositing U.S. dollars with a trading platform that is authori zed to accept dollar deposits in
exchange fo r tethers.
35 . Tether are one of the most prominent and widely-traded virtual currencies.
According to Tether" s webs ite. over 2.6 billion tethers are outstanding and traded in the market.
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36. Until November 20 17. tethers were availab le for purchase directl y from the
via the Bitfinex trading platform . OAG has reason to believe that. during thi s time. New York
investors could and did use the Bitfinex trading platform to purchase, sell. and exchange tethers
38. Accord ing to counse l the Respondents. as of December 2018. investors were once
39. New York investors may still trade tethers on severa l virtual currency trading
platform s that are licensed to do business in New York. OAG has reason to beli eve that certain
ECPs with operat ions in New York can redeem tether fo r dollars directly from Tether.
41. As part of its investigation, OAG sought documents and in fo rmation from thi rd-
party entities (for example. banks and audit firm s) that were believed to have previously
42. Having learn ed of OAG·s communication with those entiti es. counsel for Bitfinex
and Tether affirmat ively contacted OAG on November 3, 20 18 to discuss the invest igation.
Co unse l - the law fi rms Morgan, Lewis & Bockius LLP. located in New York. and Steptoe &
Johnson LLP, located in Washington, D.C. -- in formed OAG that they represented Bitfinex and
Tether jointly.
43. On November 2 1. 2018 counsel for Bitfinex and Tether. and attorneys for OAG.
discussed the investigation. Counse l indicated that Bitfinex and Tether would prov ide
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documents and information to OAG. Subsequently. counsel requested that OAG issue
subpoenas for sought-after material. Neither Bitfinex nor Tether are reg istered for service of
process in New York. Coun se l agreed to accept service of the subpoenas. via email. on beha lf of
their clients.
44. On November 27, 20 18. OAG served subpoenas pursuant to Article 23-A of the
General Business Law (the Martin Act). Executive Law§ 63( 12). and Civi l Practi ce Law and
Rules §2302(a) on Bitfinex and Tether. seeking documents and in formation. Counsel accepted
45. A copy of OAG 's subpoena to Bitfinex is attached hereto as Exhi bit D. A copy or
OAG' s subpoena to Tether is attached hereto as Ex hibit E. The requests in the subpoenas arc
identical.
46. On November 30, 20 18. counsel for Bitfinex and Tether accepted services of the
subpoenas via email , and shoti ly therea fter began producing certain documents in response
thereto.
47. On December 2 1, 2018. OAG requested a meeting with coun sel fo r Bitfi nex and
Tether to take place in early-to-m id January 20 19. to discuss various issues related to the
To accommodate them, a meeting was held on February 2 1. the detai ls of which will be
discussed below.
48. Because Bitfinex and Tether allow clients to deposit and withdraw U.S. dollars in
exchange for virtual currency, the companies hold large sums of U.S . do llars. and must maintain
relationshi ps with banks that can reli ably hold the fu nds and process client deposits and
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withdrawals. including banks that can operate in the Un ited States and ,,vii i service U.S.
individua ls.
49. As explained to OAG attorneys by Respondents· counsel. many U.S . banks and
other fi nancial institutions will not do business with unregu lated or off-shore companies that dea l
in virtual currencies.
OAG attorneys by Respondents· counse l. Bitfinex and Tether have had a succession of
unsuccessfu l banking relationships around the world over the past several years. Prior to 20 17.
Bitfinex and Tether had used several Taiwan-based banks to make and recei ve wire transfers to
fu lfi ll client orders for U.S. do llars. and for other purposes. Well s Fargo acted as the
correspondent bank. In March 20 17. Wells Fargo elected to no longer process U.S. do llar wire
transfers from Bitfinex and Tether accounts, forcing the compan ies to qu ickly find alternati ve
arrangements.
51. In a subsequent lawsuit, Bitfinex and Tether alleged that Well s Fargo·s dec ision
·'presented an existential threat to their business:· and that if Bitfinex and Tether .. could not rem it
to customers U.S. dollars that belong to their customers. !_their] business would be crippled.·· A
copy of the Bitfinex·s complaint against Wells Fargo is attached hereto as Exhibit F.
OAG attorneys by Respondents· counsel. by September 20 17 Bitfinex and Tether were using a
Puerto Rico-based entity named Noble Bank International ("Noble.. ) to handle their accounts.
Noble Bank International was a subsidiary of a New York-based ent ity named Noble Markets
LLC.
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54. According to documents prov ided to OAG. Respondents ended their banki ng
counse l, Bitfi nex and Tether closed their accounts with No ble due to low-i nterest rates and a lack
of capac ity to process a high vo lume of wire transfers to clients. among other reasons.
56. In November 20 18, Tether announced publi cly that it had ··established a banking
relationship with Deltec Bank & Trust Limited:· with headquarters in the Bahamas. In that
announcement, Tether also represented that ·'USDT in the market are fu lly backed by US dol lars
that are safely deposited in our bank accounts.'' A copy of Tether"s announce ment is attached
hereto as Ex hibit G.
57. However, at no point known to OAG has Bitfinex or Tether disclosed to clients
that they have used third party ·'payment processors'· to handle client withdrawa ls, nor have they
relationship with a (believed to be) Panamanian entity ca lled Crypto Capital Corp. (Crypto
Capital'") to act as one of their ·'payment processors:· Accordi ng to documents prov ided to OAG
by Respondents. by 20 I 8 Bitti nex had placed over one bi 11 ion dollars of co-mingled customer
written agreement was ever entered into between Crypto Capital and Bi tfi nex or Tether.
have also used a number of other thi rd pa11y ··payment processors·· to handle client withd rawal
requests. includ ing various companies owned by Bitfinex/Tether executi ves. as well as other
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'" fri ends'" of Bitfinex - meaning. human being fri ends of Bitfinex employees that were willi ng to
use their bank accounts to transfer money to Bittinex clients who had requested withdrawa ls.
6 1. OAG believes that Bitfinex required the serv ices of thi rd-party payment
processors like Crypto Capital because, at the time, Bitfi nex had no reliable bank that could or
Bitfinex Struggles to Fill Clie nt Withdrawal Requests Due to Cry pto Ca pital 's Loss or
Theft of Approximately $850 Million
62. Documents provided to OAG demonstrate that by mid-20 18. Bifinex was having
extreme diffi culty honoring its clients' req uests to withrdaw their money fro m the tradi ng
platform. because Crypto Capital. which held all or almost all of Bitfinex·s fund s. refused to
process customer withdrawa l requests. and refused or was unable to return any fund s to Bit fi nex.
63. In communi cation logs produced to OAG covering the period or April 20 18 to
early 20 19, a senior Bitfinex executive (" Merli n··) repeated ly beseeched an individual at Crypto
Capital ("'Oz"') to return Bitfinex ·s funds. For example. in August 20 18, the senior Bit fin ex
executive made clear that lack of access to the money held by Crypto Cap ital made it impossible
64. In early October 20 18. ru mors began circulating on line that Bitfinex was close to
insolvency, as num erous cl ients reported that they had been unable to withdraw their money
from the Bitfinex trading platfo rm. On October 7.20 18. Bitfinex published a notice to investors
ensuring them that the company was not inso lvent. and that rumors to that effect were '"a targeted
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65. Similarl y, on October 15. 20 18, Bitfi nex pubIished a notice to the market slating
that ''it is important for us to clari fy that: All cryptocurre ncy and fiat withdrawals are. and
have been. processing as usual without the sli ghtest interference ... A ll fiat (USO. GB P. .I PY.
EU R) withdrawals are processi ng. and have been. as usual:· (emphasis in original). A copy of
66. That was untrue. Docum ents prov ided to OAG by Respondents show that during
this time, Bitfinex was having severe problems processing cli ent withdrawals. The very same
day as the noti ce to the market set forth above, October 15. 20 18. the seni or Bitfinex executive
(''Merlin .. ) wrote the fo llowing to his contact at Crypto Cap ital (..CCC"):
***
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67. Documents provided to OAG by Respondents also demonstrate that the loss of
funds continued to threaten Bitfi nex·s abi li ty to uphold its obligation s to its investors through the
end of 20 18. Over the course of severa l months in late 2018. the senior executive at Bitfinex
l\krlin. [ I 8. I 0 . 18 08:38 I
luu mud11110111.·y i~ trapped "ith you ;u11..I " i.; an.: .;um..,111) \\ a U,ing on a n.:~ thin c rll~t of 1-;c
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68. Accord ing to documents prov ided to OAG by Respondents, and based on
statements made by counse l fo r Respondents to OAG attorneys. an individual at Crypto Capi tal
told the senior Bitfinex executive the reason that funds total ing $851 mil lion cou ld not be
returned to Bitfinex was because the funds were seized by governmental authorities in Portugal.
Poland. and the Un ited States. Based on statements made by counsel for Respondents to O/\G
attorneys. Respondents do not believe Crypto Capital's representations that the funds have been
seized.
69. Accord ing to documents prov ided to OAG by Respondents. and based on
statements made by counse l fo r Respondents to OAG attorneys. the $851 mi llion remains
inaccessible to Bitfinex.
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70. Bitfinex has not public ly disc losed the loss of fund s.
7 1. According to Respondents, the funds placed with Crypto Ca pital include co-
mingled client and Bitfinex corporate funds. For exam ple. documents produced to O/\G by the
Respondents show at least $23 million of those fund s appear to be from just one New York-
72. In an in-person meeting on February 2 1, 20 19. counsel for Bittincx and Tether
ex plained that, in order to make up for the apparent loss of $851 mil lion to Crypto Capital.
Bitfinex and Tether were in the process of contemplating a transaction that would permit
73. As described by counsel. Bitfinex would take a ·'line of cred it"' of$600 to $700
million on the reserve funds backing tethers. Counse l did not suggest what. ii' any. benefit would
accru e to Tether. or ho lders of tethers, from this transaction. Nor did counsel suggest that this
transaction wo uld be di sclosed to the public. including investors trading on the Bitfincx platfo rm
or holders of tether.
74. When asked by attorneys for OAG whether the co ntemplated transaction would
constitute a conflict of interest (given that Bitfinex and Tether arc owned and operated by the
same people), counsel characterized the im pending transaction as --arm ·s length:· without
75. At that meeting. counse l did not in fo rm OAG of the terms or schedul e of any
repayment fo r when Bitfinex planned to draw on the Tether funds. nor did cou nse l pro vide any
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76. Counsel' s disc losures at the February 2 1 meeting raised serious questions about
the viabi lity of Bitfinex as an ongoing concern. the possib ility that Tether's cash reserves would
be dissipated and unrecoverab le, and whether Bitfinex and Tether have misled their c lients
(i ncluding both clients of the Bitfinex trad ing platform. and holders of teth ers) regard ing the
77. During the February 2 1 meet ing. OAG asked counsel for the Respondents to
provide more in formation about the circumstances surrounding the loss of fund s to Crypto
Capi tal, and the imminent ·'line of credit". transaction to cover Bitfinex·s losses.
78. On February 26.20 19, OAG sent a letter to counse l fo r Bitfinex and Tether
seeking the fo llowing material, to be provided no later than March 7.20 19:
• Add itional information. inc luding production of documents. regarding how tethers
are issued and propagated into the market. as well as additional information
evidencing the "demand.. or purchase orders for tethers that counse l for Bi tfi nex
and Tether indi cated underlie the creation and issuance of blocks o r tether;
• A full written descripti on of. and any documentati on and in formation ev idencing.
the events concerning the loss of approxi mately $850 million of 8itfi ncx client
funds to Crypto Capital;
• Production of documents and informati on regard ing any co-mingled cli ent funds
that were placed with Crypto Capital. as well as any contracts or other similar
docum entation between Bitfinex and Crypto Capital;
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79. OAG ·s letter also sought specific written responses to questions concern in g the
number of New York traders using the Bitfincx trading platform and New York holders or
tethers.
80. A copy of the letter to co unsel fo r the Respondents. dated February 26.2019. is
81. On March 4.2019 counsel for Bitfinex and Tether responded to OAG ·s letter with
an email stating, •'it is not possible to get this in formation by March 1:· Counsel did not provide
primarily consistent of, in the words of counse l fo r Respondents, ·'tweets by Bitfinex and bl og
posts by Bitfinex and Tether; · all of which were already in the public domain. Nothing was
83. On March 13, 20 19. OAG again sought in formation from Bitfinex and Tether
regarding the imminent " line of credit .. transaction, clue to growi ng concern that responses to
OAG request fo r docume nts and informati on were being wi thheld until after the --Jine of credit..
transaction closed.
screenshots and picture fi les of previously-produced materials. none of which appeared relevant
or even responsive to OAG·s requests. most especially OAG requests concerning the imminent
85. On March 29. 20 19, OAG received a letter from counsel for Respondents wh ich
disclosed. for the first time, that the imm inent --Jine of credit'" transaction had already closed. two
days before. The description of the transaction diffe red significant ly from what OAG was told
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just weeks earlier in the February 2 1. 20 19 meeting. and inc luded new information about a
prev ious, undi sclosed tran sfer of $625 million from Tether·s reserves to Bitfinex. J\ s set forth in
that letter:
During November 20 18, Tether transferred $625 million held in its account at
Deltec to Bitfinex·s account at Deltec. Bitfinex, in turn, caused a tota l or $625
million to be transferred from Bitfinex's account at Crypto Capital to Tether·s
account at Crypto Capital. through a ledger entry at Crypto Cap ita l crediting
Tether·s account in the amount of $625 million and debiting Bitfinex ·s account by
a correspondin g amou nt. The purpose of th is exchange wa s to allow Bitfinex to
address liquidity issues unrelated to tethers.
In or about late December 2018. the Companies and their counsel deve loped
concerns about the ava ilabi Iity of some of the funds al Crypto Capita l. totali ng over
$850 million. While Crypto Capita l' s principa ls have represented that the
unavailable fund s have been seized or otherwise restrained by governmental
authorities in Po land, Portuga l. and the United States. the Companies grew
concerned that Crypto Capital' s principals may be engaged in a fraud .. .
On March 27, 20 19, Bitfinex and Tether initiated a transaction debiting $625
million previously credited to Tether's account at Crypto Capital. and transl'e rring
those funds to Bitfinex·s account at Crypto Capital. This transaction was made
because the prior exchange or assets was converted into a line or credit sec ured by
the DigFinex shares.
86. The transaction documents were signed on beha lf of Bitfi nex and Tether by the
same two indi vidua ls. Those two indiv iduals are also directors and owners of Dig fin ex. 13itfinex
and Tether.
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documents, the shares ·'securing"' the ·'line of cred it" are shares of iFinex that are owned by
Digfi nex.
88. Digfinex is owned and operated by the same individuals that own and operate
89. A relevant excerpt of the iFinex and Digfi nex corporate registrati on documents in
the British Vi rgin Islands. specificall y the Register of Directors for Digfin ex and iFinex. and
90. Relevant excerpts of written resolutions of the loan agreement for Di gfin ex and
iFinex. inc luding signature pages. dated March 15.20 19. and pro vided to OAG by Respondents.
March 19. 20 19, and provided to OAG by Respondents. are attached hereto as Exh ibit M.
92. OAG believes that nei ther the November 20 19, $625 mill ion transfer of Tether
reserves. nor the $900 million .. line of credit'· on Tether" s reserves have been disclosed to
investors.
93. Respondents have only produced limited relevant in fo rmation regarding the fact s
and circumstances of the $625 mi ll ion tran sfer and the subsequent •'line of credit'" transacti on.
94. OAG's ongoing investigation seeks to determine, among other things, the extent
to which New York investors are exposed to ongoing fraud being carried out by Bitfinex and
Tether.
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95. The Proposed Order accompanying thi s application requires production of the
1. All documents and information requested in the Subpoenas issued by the Attorney
General to Respondents dated November 27.2018:
11 . All documents and information req uired by the Attorney General in a letter to
Respondents dated February 26.20 19;
111. A 11 documents concerning Bitfinex users. accounts. c Iients .or customers that
reside or are believed to reside, do bus iness. or arc believed to do bu iness, in
New York;
iv. A ll documents concerning holders of tether that reside. or are be lieved to reside.
in New York ;
v. All documents and com munications concerning any business relationship with
any New York-based, or New York licensed, company. in whatever regard:
viii. All documents evidencing all requests. orders. or demands for U.S. dollar
withdrawals from the Bitfinex trading platform. including the amount requested ,
date the request was rece ived, date the request was fu lfilled. date the request was
cance lled. and status of still-pending requests. since January 2018:
1x. All documents ev idenc ing each order or request for purchase. issuance. or
redemption o f tethers since January I. 20 17, and which inc lude the date of the
order/request. the date on which it was executed. the amount of tether
purchased/ issued/redeemed, the name and wa llet address of the
purchasing/ordering/requesting person or entity, date any such
purchase/order/req uest was cancelled. and status of any sti II-pend ing
purchases/orders/requests:
x. A current accounting of all Bitfinex and Tether corporate, banking. trading. and
client accounts, inc luding but not limited to those holding U.S. or fo reign
currency, or virtua l currency. wherever located:
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x1. Identification of all New York and United States customers of Bitfinex whose
funds were provided to Crypto Cap ital and the amount of any such outstanding
fund s;
x11 1. A report, no less often than week ly, with supporting documents and
communications. evidencing any issuances or redemptions of tethers to or from
Tether or Bitfinex, which shalI inc lude identification of' the purchaser or redeemer
of tether. the amount of tethers purchased or redeemed. how long the purchase or
redemption req uest took to fu lfit I. the wallet address the tethers were sent to/came
from, and how the tethers were paid for/paid out:
xiv. Identificat ion of all Eli gible Contract Participants ("ECPs.. ) control led by U.S.
persons trad ing, past or present, on the Bittinex trading platform or invested in
tether:
xv. All documents and communications concerning any decision to permit any ECP
to trade on the Bitfinex platform or to invest in tether. including. but not li mited
to, all copies of any ECP certi Fi cation and ev idence provided to Respondents by
ECPs: and
96. OAG does not seek lo enjoin or interfere with the orderly operation of Bitfinex or
Tether' s legitimate businesses. if any. including orders by legitimate traders on the Bitfinex
platform, or legitimate tether holders, to redeem their tethers for dollars. Indeed. protecting
legitimate traders using the Bitfinex platform. and legitimate holders of tether. primaril y those
residin g in New York, is why a preli minary injunct ion is necessary now to preserve the stotu.1·
97. However, OAG does seek lo enjoin Respondents from taking any fu rther action
to access. loan. extend credit, encumber. pledge, or make any other simi lar transfer or cla im
between Bitfinex and Tether in order to preserve the status quo and protect the interests of New
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98. Beca use of the potential fo r Respondents to immed iately in itiate a further loan.
line of credit, transfer additi onal fund s if given advance notice of the Proposed Order. or take
other steps that may jeopardi ze the interests of investors. Respondents have not been given
99. No previous applicati on for the relie f requested in the Proposed Order has been
llm~
Brian M . ~ "'---
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