Court to Uphold Injunction Against Bitfinex

Also, Judge Joel M. Cohen emphasized that the question of whether the USDT is a security remains open
07 May 2019   519

The New York State Supreme Court, represented by Judge Joel Cohen, ordered Bitfinex to provide the State Attorney's Office with documents on the loss of access to fiat funds for $ 850 million and upheld a injuction that does not allow Tether Limited to use its reserves for lending the exchange and other investment activities. This is reported by the CoinDesk.

The court recognized that the claims of the prosecutor’s office should be reviewed as not accurate enough to demonstrate the damage caused. Thus, during the week, the parties must jointly or unilaterally submit to the court a plan of changes to the text of the original injuction.

Judge Cohen emphasized that the question of whether the USDT is a security remains open. He asked the prosecutor's office to conduct a more thorough investigation and explain exactly how Tether Limited and Bitfinex violated the Martin Act (Martin Act) against fraud.

The question of whether these are securities, … is a threshold question that the respondents [mentioned]. I know they are traded, but whether [they qualify] is [another matter]. I recognize the point that banks don’t have all of the dollars available at a moment’s notice. I also recognize that you’re not banks, you’re not heavily regulated.
 

Joel Cohen

Judge, New York Supreme Court

The attorney’s office insisted that it had the right to regulate Tether’s activities, since USDT tokens are available for purchase by residents of New York on the secondary market through the Poloniex exchange.

We have enough information to know, and we have every reason to believe, that the Martin Act has been violated.
 

John Castellanos

Lawyer, New York Attorney General’s office

In late April, the Prosecutor General’s Office in New York for the first time reported receiving a court order against Bitfinex in connection with the alleged loss of the last $ 850 million and the concealment of this fact from market participants.

Representatives of the trading platform said that we are not talking about permanent loss. These funds are frozen in bank accounts of Panamanian processing Crypto Capital Corp. in four countries.

To ensure liquidity, Bitfinex was forced to ask Tether Limited for a loan and, according to the Prosecutor General’s Office, has already received $ 750 million from the company's reserves. In this department reviewed the composition of the crime.

Earlier, New York State Attorney General Letitia James asked the court to uphold the order. She warned the court about the high risks for Bitfinex users and USDT holders.

Fake Trading Share to Reach 68%, - FTX Global

This figure, however, is significantly lower than what Bitwise's report and the discrepancy is explained by the difference in methodology
04 July 2019   1041

The exchange of derivatives FTX Global and Alameda Research conducted a study that estimated the volumes of fictitious transactions (wash trades), presumably prevailing in many cryptocurrency exchanges.

The report says that 68.6% of trading volumes displayed by CoinMarketCap are fake. This figure, however, is significantly lower than what Bitwise Asset Management announced in March.

The discrepancy between the results in almost 30% of the authors of the new study is explained by the difference in methodology. So, FTX Global is sure that Bitwise used an too strict approach to data analysis, which is why a significant proportion of real trading volumes fell into the category of fake ones.

While our methods are not foolproof, we believe they paint the most accurate picture of the true nature of cryptocurrency trading volume that anyone has made publicly available as of yet.
 

FTX Global Team

The Alameda methodology involves verifying the authenticity of data on trading volumes on various exchanges based on six different parameters, including manual verification of information and comparison of order books.

FTX Global Website
FTX Global Website

In particular, the experts found out that some sites provided data on the volumes of foreign exchanges for their own, with a slight delay in time. Other platforms used more advanced techniques - for example, they introduced large fake volumes only against the background of many smaller orders, thus trying to hide the true state of affairs.

The main purpose of these tactics is to raise the platform higher in the CoinMarketCap rating, creating a false impression of its liquidity. It also sometimes allows for the ability to charge a higher listing fee.