Friday, August 23, 2019

Case of the Day: James v. Ifinex, Inc., Case No. 450545/2019 (N.Y. Sup. Ct. Aug. 19, 2019)

Summary:

Defendants are Bitfinex and Tether, major cryptocurrency companies based in Hong Kong and other parts of Asia. New York attorney general investigated them for potential violation of the Martin Act, and the defendants challenged the personal and subject matter jurisdiction, as they consciously avoided New York contact in order to avoid being subject to such investigations.

The court rejected the defendants' arguments. The court found the defendants had sufficient New York contacts, as they allowed New York customers to access trading platform, opened accounts in New York bank and had an executive based in New York. The court also held Martin Act was applicable to the defendants, and documents located abroad were subject to discovery.

Takeaway:

We are back from vacation!

The opinion is available here. The opinion itself is not surprising or radical--it is a standard application of the personal jurisdiction doctrine and Martin Act coverage. But because digital currency is new and the companies have consciously attempted to avoid New York contact, it makes for a notable news.

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