Tether and Bitfinex Navigate FOIL Request Terrain with a Transparency Pivot

Tether and Bitfinex have withdrawn their opposition to a New York Freedom of Information Law (FOIL) request filed by Coindesk earlier this year. Nevertheless, they emphasize that transparency doesn't imply an unrestricted release of all documents.

Concerns have arisen about the latest NY FOIL request, particularly in light of the behavior exhibited by journalists, including Zeke Faux, Shane Shifflett, and Ada Hui. Tether and Bitfinex want to make it clear that they will not further appeal this FOIL request.

However, it does not compromise their commitment to handling business information responsibly. Both companies remain open to constructive engagement with journalists and regulatory authorities adhering to ethical reporting standards and respecting data privacy boundaries. They emphasize that responsible document review and handling are crucial before any public release, clarifying that transparency does not mean unrestricted public disclosure of all documents.

In January 2022, a report from Finance Magnates stated that CoinDesk had officially entered into a legal dispute between stablecoin operator Tether and the New York Attorney General. The issue revolved around the disclosure of Tether's reserve breakdown. The conflict began in June, 2021 when CoinDesk filed a Freedom of Information Law Request (FOIL) for documents detailing Tether's reserve composition.

Tether initially resisted the request, but CoinDesk's appeal was successful, leading to access being granted. The ongoing dispute involved Tether's attempt to block access, citing concerns about compromising its competitive advantage, investment strategy, and relationships with crucial partners.

CoinDesk maintained its interest is solely in the breakdown sent to the Attorney General in May, while Tether argues the information is already publicly accessible without jeopardizing its competitive position. Tether and Bitfinex also note instances of one-sided and inaccurate reporting from various media outlets, including the Wall Street Journal and Bloomberg, whose journalists are involved in this FOIL request.

Tether and Bitfinex Agree to Drop Opposition to FOIL Request
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A report earlier this year stated that Bitfinex reportedly did not disclose a confidential report revealing security lapses responsible for the theft of over 119,000 BTC in August 2016, valued at approximately $3.2 billion. The Organized Crime and Corruption Reporting Project obtained the report, commissioned by iFinex, the owner of Bitfinex, and conducted by blockchain services firm Ledger Labs.

The report indicated Bitfinex's failure to implement recommended operational, financial, and technological controls by its security partner Bitgo. It highlights a flawed security system, storing two of three keys on a single device, potentially giving hackers complete access to the exchange's internal system. The report additionally suggested the hack may have originated from Poland based on the source's IP address.