Bitcoin Daily: NYAG To Clarify Bitfinex Demands In Court; OneCoin Sued By Defrauded Investors

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The New York Attorney General (NYAG) will try to make its case against Bitfinex after receiving a court order to refine its demands on the exchange, as well as narrow the case against the companies and its actions.

Late last month the NYAG alleged that after Bitfinex lost $850 million, it used funds from Tether to secretly cover the shortfall. But while the NYAG pointed out that the case has not prevented the two companies from continuing “to operate their businesses in the normal course, as they have continued to do since the injunction,” Bitfinex complained that the injunction could hurt traders by blocking access to the credit line by Tether. In addition, the NYAG has not presented any solid evidence that Bitfinex and its case fall under the Martin Act.

In other legal news, an investor has sued a company accused of running a multibillion-dollar international pyramid scheme based on the crypto OneCoin.

In the complaint, Christine Grablis revealed that she lost about $130,000 that she invested in OneCoin. In addition to requesting that the case be filed as a class action lawsuit, she is also asking for unspecified damages.

According to Bloomberg, the suit comes after Konstantin Ignatov was charged in New York in March with conspiracy to commit wire fraud related to the scheme. His sister Ruja, the founder and original leader of OneCoin, was charged with wire fraud, securities fraud and money laundering. OneCoin, as well as two other men, have also been named defendants in the suit.

U.S. prosecutors have said that OneCoin generated 3.4 billion euros ($3.8 billion) in revenue from the fourth quarter of 2014 to the third quarter of 2016. Although the value of OneCoin allegedly rose from 50 euro cents to 29.95 euros in January, the crypto actually had no real value and couldn’t be used to buy anything.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.