CRYPTO MOVERS AND PRICES
CRYPTO STORY OF THE DAY
Yesterday, Judge Hon. Joel Cohen Elected To Not Dismiss The New York Attorney General's Claims Against Bitfinex (BFX) And Instead Revisit The Matter In 90-Days - The Outcome Was Described As A Loss By Most Pundits - That Said The Market Is Showing Little Concern Around The Case
As a reminder, the case concerns the April claim that BFX had misrepresented the state of $850M of customer funds and improperly set a loan arrangement from an associated entity (Tether) to deal with the issue. Judge Cohen had apparently had an initial interest in finding a resolution yesterday but instead elected not to dismiss the proceedings. This means that the stay the AG has ordered on certain BFX operations will remain in effect. Most notably BFX will not be able to utilize Tether funds to aid in deposit withdrawals of exchange clients. Since the order was initially made at the end of April, BFX successfully raised~1B for their UNUS SED LEO exchange token.
Takeaway: When the order was initially set, BFX had far fewer options in handling exchange flows. The LEO token offering has effectively resolved the most significant issues caused by shutting down the Tether loan. The market has responded in kind with the BFX exchange spread effectively going away and now with Tether posting its all-time largest market cap in the range of $4B. While surely Tether and BFX will want to rid themselves of any legal issues, the true resolution of this episode will come if / when the companies are able to recoup the initial frozen / missing $850M from Crypto Capital accounts.