Tether faces investigation by New York’s Attorney General after court approval

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Posted on: July 10, 2020 5:53 pm EDT

Tether faces investigation by New York’s Attorney General after court approval

The Tether cryptocurrency is the target of a new investigation that will be conducted by New York’s Attorney General (AG). The green light was given by a New York’s Supreme Court’s appellate division, which issued an opinion that grants the AG permission to follow up on subpoenas filed by the AG against two crypto businesses. Even though Tether Holdings Limited and the Bitfinex cryptocurrency exchange – the defendants – have had no formal accusations of fraud or any wrongdoing, the case will continue its course as the court rejected the appeal.

In 2018, New York State AG Letitia James started an investigation because of rising questions about Tether and how true it was that the currency was actually backed by US dollars. Even though she presented some promising leads for the investigation, both Tether and Bitfinex filed an appeal and were able to suspend the investigation temporarily.
The opinion order from the state’s highest court is dated yesterday, meaning that the investigation can continue its course.

James said in a statement obtained by Forbes, “Today’s decision validates our office’s ability to use its broad and comprehensive investigative powers to protect New Yorkers. Not even virtual currencies are above the law. We are pleased with the court’s decision, and will continue to protect the interests of investors in the marketplace.”

According to a report from a representative of the AG, James “cannot confirm or deny that the investigation” includes Brock Pierce, who helped create Tether to offer crypto investors a quick way to enter or exit a position. Pierce is now running for president as an independent on a pro-technology platform, and Tether had been created to be different from other cryptocurrencies. It was meant for the digital token to keep the same stable price, which would be backed by real US dollars. That, however, has not happened, as Tether has previously acknowledged.