Zhao Dong: Bitfinex and Tether are Political Issues for the U.S. Authority
DGroup founder and Bitfinex shareholder Zhao Dong says that it is a political issue rather than a true-false for the U.S.’s attitude towards crypto exchange Bitfinex and the dollar-pegged stablecoin Tether.
On July 29, the New York Supreme Court (NYSC) ruled to give a 90 day extension to the ongoing case of crypto exchange Bitfinex and Tether’s parent company iFinex against the New York Attorney General (NYAG). Despite the delay, Bitfinex’s inability to convince the court to dismiss its case on Monday could be viewed as a bad sign for the crypto exchange. On hearing this, Zhao Dong, the shareholder of Bitfinex took to Weibo (Twitter equivalent in China) saying
“Bitfinex and Tether are fine for now. Nevertheless, NYAG will definitely keep a close eye on them. It is not a matter of right or wrong to the U.S. authority, but a political issue, the same way like they want to kill off Huawei.”
The longstanding questions about Tether USDT’s claimed dollar backing have been exacerbated by the NYAG case against its issuing company Tether, while the stablecoin still trades around $1 and has been attracted increasing appetite from crypto investors particularly Chinese crypto traders. As data from Chainalysis showed that Chinese cryptocurrency exchanges accounted for more than 60% of total Tether trading globally in 2019.
The leading crypto exchange Bitfinex has endured a tenuous relationship with the NYAG, after the latter petitioned this April the New York Supreme Court to stop the exchange from drawing on a $900 million line of credit it established with Tether to cover $850 million in losses it incurred when its fiduciary relationship with payment processor Crypto Capital went south.
Tether issuer iFinex subsequently fought back that the NYAG’s claims were “riddled with false assertions” and that the purported $850 million loss was not lost but has been safeguarded, and moved to dismiss the case arguing that the NYAG office had no legal basis to sue it for the reason that Bitfinex wasn’t operating in New York and never served customers within New York.
Indeed, jurisdiction and the NYAG’s ability to compel a Hong Kong-based business to comply with U.S. law rests at the heart of this case.