Today we filed our reply brief in the appeal before the First Department of the New York Supreme Court (Appellate Division). The reply is in response to the Office of the New York Attorney General’s brief filed almost 10 days ago.
Our view is that the New York Attorney General’s entire proceeding should have been dismissed by the Supreme Court at first instance. The proceeding does not arise from any conduct by Bitfinex or Tether in New York and tether tokens are not securities or commodities within the meaning of New York’s Martin Act. Moreover, the Attorney General’s brief reads as if it is Bitfinex’s and Tether’s regulator, which it manifestly is not.
Furthermore, the New York Attorney General’s office offers a highly misleading factual presentation. It describes the fully secured loan on commercially reasonable terms as nothing more than an IOU from Bitfinex “that seemed unlikely to be repaid,” conveniently omitting the fact that Bitinex repaid $100M of that loan months ago, ahead of schedule, and with interest. The office of the Attorney General also takes issue with UNUS SED LEO tokens, a product that expressly barred U.S. buyers and did not even exist until after the Attorney General’s office obtained its ex parte order this past April. The UNUS SED LEO token therefore cannot provide a statutory basis for this proceeding.
Any criticism of our “tactics” in this case or in any other proceeding is baseless. We have always approached the Attorney General and the court in good faith. We produced tens of thousands of pages of documents in answer to questions of personal jurisdiction since the Attorney General brought this special proceeding in April and, before that, further thousands of documents were provided. We have always respected the court’s orders in this matter and we will continue to do so.
At the end of the day, the Attorney General has not identified any victim in this whole proceeding, because there is not. Holders of tethers are entitled to redeem them for exactly what they paid for them – no more and no less – and Tether has had no issue satisfying redemption requests to anyone, even after the New York Attorney General’s incendiary case. Tether has proven itself to be a useful, liquid, and trusted digital asset in the crypto ecosystem, and its use case and market capitalization since the New York Attorney General began this proceeding has grown, not shrunk. Tether serves a key function in the digital economy, and the community’s chosen stablecoin is here to stay.