The Supreme Court of New York has determined that crypto exchange platform Bitfinex is under the jurisdiction of the state’s Attorney General.

According to court documents filed on August 19, the Supreme Court’s ruling will allow the New York Office of the Attorney General (NYAG) to keep on investigating the allegations of fraud made against Bitfinex.

Denied Motion

Documents showed that Judge Joel Cohen denied a motion filed by Bitfinex to stop a move by the NYAG to prosecute the company under the Martin Act.

The Attorney General’s office initially claimed that the crypto exchange and associated stablecoin partner Tether concealed an $850 million loss. The action can be construed as misleading New York investors.

The charges have led to a drawn-out legal scrimmage between state prosecutors and Bitfinex. The latter has claimed that it hired more than 60 lawyers and spent $500,000 so it can comply with the NYAG’s documentation requests.

Customers in the State

The issue of whether the Attorney General has jurisdiction recently became a major argument in the case. Bitfinex and Tether’s legal representatives claimed that documents they have submitted to the court showed that the two companies had customers in the state. New York has a distinctly rigid regulatory system for cryptocurrencies.

Their lawyers also claimed that even if the NYAG prove that they had clients in the state, it couldn’t prove if those people were harmed by Bitfinex and Tether’s purported actions.

However, Judge Cohen ruling denies the two companies’ motion due to it being extra-jurisdictional. He also dissolved the temporary stay of investigation by the NYAG.

