18.06.2021

BitFinex Can Hold On to Documents About Alleged $850 Million Cover-up

In a Sept. 24 court order, appellate court justices David Friedman, Peter Tom, Troy Webber, Ellen Gesmer and Jeffrey Oing moved to stop a previous ruling by New York Supreme Court Judge Joel Cohen that required BitFinex to produce documents and information related to the $850 million loss on the exchange.

The Appellate Division of the New York Supreme Court has ruled that Bitfinex can hold on to documents pertaining to the alleged cover-up of an $850 million loss on the Bitfinex trading platform.

Ongoing case

As Cointelegraph reported in April, the New York Attorney General’s office (NYAG) filed a complaint against parent company iFinex, Bitfinex and affiliated stablecoin issuer Tether alleging that the companies defrauded New York investors by covering up an $850 million loss on the Bitfinex trading platform.

Attorney General Letitia James wrote at the time:

“Our investigation has determined that the operators of the ‘Bitfinex’ trading platform, who also control the ‘tether’ virtual currency, have engaged in a cover-up to hide the apparent loss of $850 million dollars of co-mingled client and corporate funds.”

Cointelegraph further reported that the Attorney General revealed that her office obtained a court filing which alleged that the companies were in violation of New York law and that Bitfinex never revealed the loss to investors. The filings claimed that Tether engaged in a series of corporate transactions in which Bitfinex got access to up to $900 million of Tether’s cash reserves and used the funds to hide losses and inability to handle clients’ withdrawals.

Bitfinex and Tether will pursue appeals

Cointelegraph reported on Aug. 20 that Bitfinex and Tether replied to Judge Joel Cohen’s ruling in the New York Attorney General ongoing case against both companies by saying that they would appeal the decision not to throw out the case due to lack of jurisdiction.

Google’s Quantum Computer Breakthrough Not a Risk to Bitcoin, Says Dev

A well-known cryptographer has poured cold water on fresh fears that recent advances in quantum computing could endanger Bitcoin security.

Bitcoin versus Google’s “quantum supremacy”

In a Twitter discussion on Sept. 24, ex-Bitcoin Core developer Peter Todd led the criticism, which followed claims from Google it had achieved “quantum supremacy.”

In a paper seen by the Financial Times, the tech giant said it had created a computer that solved an equation which would otherwise take 10,000 years in just 3 minutes 20 seconds.

“To our knowledge, this experiment marks the first computation that can only be performed on a quantum processor”, the publication quoted the paper as saying.

Quantum computing has previously formed an area of contention for cryptocurrency proponents. In 2017, for example, experts dispelled myths that such machines could undermine the security of the Bitcoin blockchain.

“Nowhere near breaking cryptography”

Similarly, Todd now concluded that financial impediments to Google’s latest creation alone would keep Bitcoin free from potential trouble.

“It means nothing because Google’s quantum breakthrough is for a primitive type of quantum computing that is nowhere near breaking cryptography”, he wrote about the new achievement.

He added:

“We still don’t even know if it’s possible to scale quantum computers; quite possible that adding qbits will have an exponential cost.”

Earlier this month, details emerged that the United States’ National Security Agency, or NSA, was attempting to research and create quantum-resistant cryptography.

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