The crypto markets have been closely following the situation that has been unfolding around the popular and controversial Bitfinex cryptocurrency exchange, which also owns the controversial stable coin Tether, which is accused by the NYAG of allowing US-based users to flout the Bitcoin (BTC) and crypto leveraged trading restrictions.
Because of the significance of the cryptocurrency exchange and stable coin, analysts are noting that the outcome of this court case could lead to volatility for Bitcoin and the aggregated crypto markets in the week ahead.
Bitfinex vs NYAG Proceeds in the NY Supreme Court, Will Bitcoin Be a Center Topic?
The court proceedings between the embattled cryptocurrency exchange and the crypto-adverse NYAG began a handful of hours ago and Bitcoin has already become a topic of discussion, as the initial proceedings appear to be centered around whether or not the court has subject matter jurisdiction over this case as Tether – the exchange’s legal team claims – is not a security or commodity.
Zach Voell discussed the happenings of the court proceedings in a recent tweet thread, explaining that the Judge was questioning whether or not Tether is a commodity, with the AG claiming that it is, partially because it can be used to trade both Bitcoin and Ethereum.
“Judge: So if Tether ‘relates to’ securities or commodities, that’s enough? (to trigger Martin Act things) AG: Yes, absolutely (referencing that it’s used to trade $ETH and $BTC)”
Notably, it appears that the center of the initial proceedings also revolved around whether or not Tether is a security/commodity, with the issue of whether or not Bitfinex enabled New York residents (who are US citizens) to open accounts and trade Bitcoin (BTC) and other cryptos using the platform.
“I don’t think we’re getting a ruling today; the judge wants to consider more carefully,” Voell concluded.
Will These Proceedings Contribute to BTC Volatility?
Importantly, as Tether plays such an integral role in the crypto markets, many analysts believe that the outcome of these hearings will contribute massively to Bitcoin’s volatility and price action down the road.
Luke Martin, a popular cryptocurrency analyst on Twitter, spoke about this in a recent tweet, noting that the court hearings are the “biggest news event of the week.”
“$BTC starting the week wedged inside two key levels. – 9350 has been defended for a few days now – 9650 is previous range low, now acting as resistance. Biggest news event of the week is later this morning with the iFinex in the New York Supreme court,” he explained.
As the hearings surrounding Bitfinex and Tether continue to unfold, it is likely the world will gain a better understanding of whether or not the controversial stable coin and its embattled issuer will have any adverse impact on the markets.
Author: Cole Petersen