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On April 24, 2019, the Supreme Court issued an exparte order requiring the respondents to produce certain documents and prohibiting them from

1. taking any further action to "make any claim . . . on the U.S. dollar reserves held by Tether" [Holdings];
2. making any payments to any individual associated with respondents "from the U.S. dollar reserves held by Tether" [Holdings];
3. altering or destroying any documents related to the investigation

On April 30, 2019, the respondents filed a motion to modify or vacate the Supreme Court’s exparte order. On May 16, 2019, the Supreme Court partly granted their motion by modifying the temporary restraining order but rejected their motion to vacate.

On May 21, 2019, filed an instant motion styled as a motion to dismiss using CPLR 3211[a][2]) lack of subject matter jurisdiction and CPLR 3211[a][8] lack of personal jurisdiction as arguments. The Supreme Court denied the motion on August 19, 2019. The respondent appealed the decision.

Court of Appeals’ opinion

On July 9, 2020, the Court of Appeals denied the respondents motion to dismiss, citing the facts that under the Martin Act, the high court “has no further role in the Attorney General’s investigation” once it an order responding to a GBL 354 application has been issued. The only exception is to “rule on a motion by either party to vacate or modify the order, as respondents made here.”

"All that remained was the Attorney General's ongoing investigation, in which, by statute, the courts have no further role at this stage," according to the Court of Appeals.

Additionally, the Appeals Court explained, "Here, petitioner is investigating, inter alia, whether respondents have committed fraud (as broadly defined in the Martin Act) 'within or from' New York (GBL 352) by making untrue claims about the cash reserves backing tether and their ability to honor customer withdrawal requests. She has sought documents and information from respondents going back to 2015, which is well within the applicable six-year statute of limitations (CPLR 213[9])…"

Furthermore, the Appeals Court expounded, "Accordingly, petitioner has demonstrated that respondents' activities in New York were sufficiently related to the subjects of petitioner's investigation to satisfy specific personal jurisdiction for the purposes of GBL 354 … Petitioner has made a sufficient showing of personal jurisdiction in the context of this Martin Act investigation for Supreme Court to have issued the ex parte order pursuant to GBL 354. The Martin Act authorizes the Attorney General to investigate securities or commodities fraud (as those terms are defined by the Act) 'within or from' New York (GBL 352). Petitioner may properly investigate a foreign entity if she 'has a reasonable basis for believing that [it] has violated a New York statute.'"