An Introduction to the Tether/Bitfinex Controversy

Bitfinex is one of the historically largest Bitcoin exchanges and Tether is by far the largest stablecoin. Each potentially has significant influence over the industry on their own, and their interconnectedness makes this more of a concern. However, since both were founded years ago and many of the events have happened and been in revealed in bits and spurts it can be difficult to understand their place in the cryptocurrency environment. This will hopefully serve as a basic introductory document that will then prompt further research.

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Sunday Reads – Things I Found Interesting 2021-06-13

Books I Read

Insomnia – This book by Stephen King is a supernatural thriller (like many of King’s books). If you are a fan of King you will likely enjoy this, especially with the references back to Dark Tower and to Derry more broadly. If you are not a fan of King, I think he has better works for you to read. Be forewarned if you listen to the audiobook, the music selections between chapters are incredibly annoying.

Movies I Watched

Enron: The Smartest Guys in the Room – This documentary takes a look at the Enron fraud. There are many messages to be learned here that can be applied to other frauds.

I did a thread with my thoughts while watching the movie:

El Salvador

David Gerard covers the El Salvador situation brilliantly.

Yashar Ali

A fascinating profile on the prolific tweeter in LA Magazine.

ICYMI

In this article I try to look at the absurdity of Elon buying, selling, and shilling Bitcoin and Dogecoin.

In this article I try to wrap my head around just how big Tether really is.

In this article I discuss why I do not see venture capitalists as a sign of quality or due diligence for a crypto protocol.

In this episode Cas and I discuss the new initiative for Coinbase Media and Coinbase fact checking

I wrote about Coinbase media here.

Cas covered it here.

In this show we discuss the NYAG investigation of Bitfinex and Tether, the history of Bitfinex and Tether and more.

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How Big is Tether?

I have been following Tether for about three and a half years and still I struggle to really grasp how large it is. It is so absurdly large that it has started warping my perception of other huge amounts of money. I hear a million dollar fraud now and my first thought is “that’s it”, and so I am writing this to help provide some comparisons so I can help keep the scale of Tether in mind.

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Episode 8 – Coinbase Media and Why Venture Capitalism Hates Journalism — Crypto Critics’ Corner

Coinbase Media and why Venture Capitalism Hates Journalism Crypto Critics' Corner

Bennett Tomlin and Cas Piancey discuss how Coinbase plans on creating a media company to confirm its own version of the facts and report its own version of the truth. Is journalism entering its final death spiral or are VC bros just losing their minds? Read more here: https://protos.com/coinbase-crypto-exchange-media-content-marketing-journalism/ https://bennettftomlin.com/2021/05/31/a-rant-about-coinbase-media-and-coinbase-fact-checking/

In this episode Cas and I dive into the recent reporting surrounding Coinbase launching a new media arm and fact checking situation. We also talk more broadly about what we think the future of media might look like.

Cas wrote about this at Protos.

Coinbase is hunting top editorial talent — for journalism or marketing?

I wrote about this here:

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Elon and the Absurdity of Bitcoin

Elon Musk is considered by fools to be among the smartest people alive. He will be discussed as though he has the intellect of Nikola Tesla, combined with the ability to create products of Thomas Edison. This towering intellect is a facade built on the willingness of others to continue to propagate the myth, and nothing makes that clearer than Elon’s relationship with Bitcoin.

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Sunday Reads – Things I Found Interesting 2021-06-06

Books I Read

Critical Role: Vox Machina Origins: Series I & II Collection – A beautiful and brilliantly written series of comic books that tell the story of how the adventuring group Vox Machina came to be. I truly enjoyed reading through this collection on a quiet Sunday morning.

The Four Hour Workweek – This book by Tim Ferriss is a book I have read several times now. I always have somewhat complicated feelings towards it. There are many techniques and ideas in the book that I personally am unlikely to ever use. However, it is often useful for me as a reframing tool. It is a good way to remind yourself that there are often social scripts that we allow to develop into limits on ourselves. Also there is good advice on starting information businesses.

Dungeons and Dragons

This video is incredibly valuable for 5e DMs who would be interested in pulling forward material from 4e to help combat. It convinced me to go out and buy the 4e Monster Manual. Giffyglyph has an awesome tool to make 5e monsters in the style of 4e as well.

NFTs

Protos reports on the blow up of the NFT bubble.

ICYMI

In this article I rant about the new media and fact checking initiative by Coinbase

In this episode Cas and I discuss the ill-fated Canadian bitcoin exchange QuadrigaCX

In this podcast I discuss Tether, Binance, MakerDAO, and other systemic risks.

In this article I make a simple argument that shows there were unbacked Tethers.

I did a quick little question and answer about Bitfinex and Tether. Since no one was there at the beginning I just started sharing Bitfinex and Tether fun facts.

There are still way too many unanswered questions surrounding the acquisition of TrueUSD. Cas Piancey takes a look.

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A Simple Deductive Argument Proving There Were Unbacked Tethers

There are certain claims and objections that I have to respond to frequently. Some people will still claim that Tether has never had unbacked Tethers. I am attempting to create a valid and sound deductive argument that will conclusively prove that is untrue. I love philosophy and deductive reasoning, so may do a few of these. If you want to respond, please respond in a manner that addresses the deductive argument, either in form or in challenging the soundness of the premises.

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My Appearance on ‘When the Music Stops’ with Aviv Milner

The Tether Situation with Bennett Tomlin (Part 1) When the Music Stops

In part one of a two part episode, Bennett Tomlin discusses the legal issues, liquidity problems and spotty history surrounding Tether. Tether is the largest stable coin in the cryptocurrency space, with more than 60 billion USD equivalent in circulation. It acts as the the shadow bank for a majority of exchanges worldwide, exchanges like Binance and Bitfinex. In 2014 Tether made a promise that each unit of Tether would be 1-to-1 backed by a real dollar. Since then, a lot has changed. Check out Bennett's work on his blog: https://bennettftomlin.com/ Find him and his partner in crime on twitter: @BennettTomlin @CasPiancey @CryptoCriticPod Their latest show on Tether and other scams: https://cryptocriticscorner.com/ Want to come on the podcast? Reach out to me at aviv@blacktieconsultants.com Special thanks to the r/buttcoin community for encouraging skeptical inquiry. And special thanks to @Bitfinexed Upcoming podcasts: David Gerard MicroStrategy Inquiries And more! — Send in a voice message: https://anchor.fm/aviv-milner/message

The Tether Situation with Bennett Tomlin (Part 2) When the Music Stops

Continuing on the discussion of systemic risks associated with Tether, Bennett describes additional risks in the broader cryptocurrency space. He talks Binance as well as MakerDao & Dai. For those who don't know, Dai is a crypto-collateral stable coin which allows users to interact with smart-contracts on the Ethereum blockchain and take out loans (denominated in Dai) against their cryptocurrency. Bennett describes the contraversial and potentially dangerous move by the decentralized band of merry bankers to use a tether-like stable coin as collateral (USDC). We also discuss the nature of the bubble/ponzi that is the cryptocurrency space as it currently stands. Check out Bennett's work on his blog: https://bennettftomlin.com/ Find him and his partner in crime on twitter: @BennettTomlin @CasPiancey @CryptoCriticPod Their latest show on Tether and other scams: https://cryptocriticscorner.com/ Want to come on the podcast? Reach out to me at aviv@blacktieconsultants.com Special thanks to the r/buttcoin community for encouraging skeptical inquiry. And special thanks to @Bitfinexed for positive direction and regular ideas. Upcoming podcasts: David Gerard MicroStrategy Inquiries And more! — Send in a voice message: https://anchor.fm/aviv-milner/message

I recently went on this new podcast to discuss Tether, systemic risks to crypto, and my overall thoughts on the industry as a whole. I really enjoyed this one and recommend you give it a listen.

Part 1:

Part 2:

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Episode 7 – QuadrigaCX: the Canadian cryptocurrency exchange that just won’t die — Crypto Critics’ Corner

QuadrigaCX: the Canadian cryptocurrency exchange that just won't die Crypto Critics' Corner

Bennett and Cas dive into what happened at QuadrigaCX – once the largest Canadian Bitcoin exchange. If you'd like to read a more detailed piece you can find "Death Fraud" here: https://medium.com/coinmonks/death-fraud-6920cc93d0a7

In this episode Cas and I dive into QuadrigaCX, the ill-fated exchange who was using Crypto Capital, lost client funds, got their start in ponzi schemes, may have faked their own death, and more.

Cas wrote an in-depth piece on Cotten’s death fraud.

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