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Joseph Lubin: Tether’s Rivals to Gain Traction amid Bitfinex ‘Mess’

Last Updated March 4, 2021 2:45 PM
Tedra DeSue
Last Updated March 4, 2021 2:45 PM

By CCN.com: The Bitfinex “mess” won’t be resolved anytime soon, charged Ethereum co-founder Joseph Lubin.

His comments, which came on Thursday, come after a New York Supreme Court judge scathingly criticized the NY Attorney General who filed an injunction against Bitfinex and Tether.

The office, led by AG Letitia James, contends Bitfinex and Tether committed fraud when it handled the hack that led to the loss of $850 million of tokens.

While Lubin didn’t mention the Supreme Court development, his thoughts align with those of the judge.


Bitfinex Mess Will Benefit Other Stable Tokens

In 2016, hackers accessed Bitfinex and made off with BTC from the exchange’s hot wallets.

The entire matter in which $850 million of tokens went missing won’t be resolved anytime soon, Lubin said at the Fluidity Summit conference in New York.

Bloomberg reported  Lubin saying:

“It seems like a really big mess that probably won’t get better. Tether is somewhat important to our ecosystem because it’s used by different institutions to effect more fluid trading. There are other price-stable tokens out there – many others – and I think they’re going to gain traction because of this. I think that will be a really good thing.”

Lubin added:

“All prices on the planet are being manipulated. Any time that well-resourced actors can get in there and do something, you have to expect them to do that. So we need to build better systems.”

Lubin remains optimistic about the space, despite the Bitfinex mess.

“The status of things is great. Since that price correction, the system has grown enormously because the people who build the systems, who were pulled in by excitement driven by price growth, stay in the system. Once you’ve seen the potential, you can’t un-see it.”

Bitfinex’s Legal Woes

In April, James’ office obtained a court order to shut down Bitfinex and Tether from operating in New York over the loss of $850 million funds through some questionable happenings. She believes that the scheme entailed Bitfinex using funds from Tether’s reserves to help cover the losses.

Bitfinex and Tether responded by saying the order, which is seeking injunctive relief, was obtained without notice or a hearing in an attempt to compel Bitfinex and Tether to provide certain documents.

In joint statements, the pair said the NY AG’s court filings were written in bad faith and are riddled with false assertions.

NYAG’s Injunction Petition is Amorphous, Endless

NY Supreme Court judge Joel Cohen suggested during a hearing held Monday that the NY AG was too zealous in the scope of the documents it wanted from Bitfinex and Tether.

James’ office demanded that Tether turn over a bunch of documents crypto traders are reluctant to put in the hands of the government. For example, the New York AG wants full records on all traders who live in New York and complete records on people who hold Tether and are believed to reside in the state.

It looks like the judge agreed that James’ had gone too far. Cohen said:

“The preliminary injunction that we have right now is vague, open-ended and not sufficiently tailored to precisely what the AG has shown will cause imminent harm. I think it’s both amorphous and endless.”

Cohen’s suggestion was that both sides resolve this matter, leaving the courts out of it. He said:

“What I would suggest you both do is meet and talk about it, you seem like a reasonable group, in let’s say a week either with a single or proposed revision that accomplishes what we’re trying to accomplish here, and if you can’t, with individual proposals.”