Broken Promises and Lies from Bitfinex and Tether

Bitfinex and Tether are perennially dishonest members of the cryptocurrency ecosystem.

Giancarlo claimed: “Bitfinex will never reveal to the public the public keys where it stores the Bitcoins and the Litecoins of his customers.” (archive) They have. (Note: I do not object to them sharing this information)

Bitfinex claims to have begun fiat operations in 2015. (archive) In 2014 Bitfinex allowed fiat withdrawals via wire. Plus, Giancarlo was talking about fiat in 2014. (archive)

Raphael Nicolle claimed no coins or fiat could be stolen. (archive) Bitfinex has been hacked at least twice, Tether has been hacked once, hundreds of millions of dollars of their funds became inaccessible to them after they gave them to alleged money launderers.

After being hacked in 2016 Bitfinex promised a security audit, Ledger Labs was engaged to perform this function (archive) but the audit itself was never released and no post-mortem of the hack ever came.

After being hacked in 2016 Bitfinex promised a financial audit, they hired Friedman LLP to complete it. (archive) It has never been released and is believed to have never been completed, though Bitfinex has never provided any update.

On October 7th 2018 Bitfinex claimed to be completely solvent. (archive) Bitfinex had lost access to hundreds of millions of dollars worth of funds that they had given to alleged money launders and were effectively insolvent.

On October 15th 2018 Bitfinex claimed fiat withdrawals were working normally. (archive) This was a lie and they were privately begging Crypto Capital to release their funds to avoid affecting the crypto marketplace. (Merlin is Giancarlo)

Tether claimed during November and December of 2018 that every Tether was backed by corresponding currency. This was untrue and Tether was effectively insolvent.

Finally the most famous promise of them all: “Our reserve holdings are published daily and subject to frequent professional audits.” (It’s in the whitepaper (my copy) as well) Tether has never been audited and when they attempted an audit a Tether spokesperson said, ““We confirm that the relationship with Friedman is dissolved.  Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable time frame.” (archive) Furthermore, reserve holdings are published daily, but Tether continues to lie on that page as they have been for years.

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