iFinex is going on trial on Monday, 29th July in New York.
The Office of the Attorney General of New York (OAG) AND iFinex have been locked in a legal battle since April, with the OAG claimed that Tether, a stablecoin owned by iFinex, made a $700 million loan to cover embezzlement.
Since then, there have been allegations, complexities and heated communication, with a further trial scheduled next Monday to ascertain whether the Prosecutor’s Office has the jurisdiction to open an investigation on iFinex. This is due to the fact that the firm is based on the British Virgin Islands, and has allegedly not accepted US clients since 2018.
Tether is the most important stablecoin, which are cryptocurrencies designed to have reduced price volatility, which is measured relative to a “stable” asset. Tether’s market value is over $4 billion (USD).
While there are other stablecoins that are providing competition to Tether, such as USDC, TUSD, PAX and DAI, they hardly add up to 23% of Tether’s market valuation, with Tether being 7 times greater than the sum of all its competitors in terms of trading volume.
But what does the trial mean for the crypto market?
In the short term, if iFinex loses the trial, Bitcoin would gain in terms of value. However, a caveat is that a negative outcome for iFinex would also result in lawsuits against Tether and Bitfinex (also controlled by iFinex), which would negatively impact crypto prices overall.
The truth is that in the medium term an eventual defeat of iFinex and consequent reduction of Tether’s market share would be excellent for Bitcoin.
However, a negative outcome on July 29 would open the door to a lawsuit against Bitfinex and Tether, which could later result in a blocking of the values and consequent negative impact on cryptocurrency prices as a whole.
One thing is for certain, investors should keep an eye out for the results of the trial and be wary about its effects on crypto prices.