Category: Fraud

Tether’s Executives are Deeply Conflicted

~ Bennett Tomlin ~ Leave a comment

Let’s start at the top (or more accurately at the figurehead): Jean Louis Van Der Velde, the CEO of both Bitfinex and Tether is also the executive director for a Hong Kong based Venture Capital Firm. (Archive)

Giancarlo Devasini, the Chief Financial Officer for both Bitfinex and Tether, is a shareholder and director in BlueBit Capital with Silvano di Stephano the Chief Investment Officer for Tether. BlueBit Capital is a cryptocurrency investment fund.

https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=oBdhD/5_PLUS_L7RIRhat6MJLng== (Archive)

It is unclear why Tether was suing to stop the disclosure of the identity of their CIO when we already know. I guess perhaps they do not want additional attention of BlueBit. It’s especially striking considering that Silvano was on the loan agreement between Bitfinex and Tether.

https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=0pbbMaSfXK5hx68VPp_PLUS_fWQ==
https://twitter.com/ExkrementKoin/status/1409981893907472387

Paolo Ardoino, the Chief Technology Officer for both Bitfinex and Tether, was a director for Delchain. Delchain is the cryptocurrency focused offshoot of Deltec Bank and Trust, where Tether banks. Importantly Delchain recently launched Fulgur Alpha, (archive) a cryptocurrency hedge fund that they onboarded to Bitfinex.

Claudia Lagorio, the Chief Operating Officer for Bitfinex and Tether, is married to Paolo Ardoino, a director for Delchain.

The only Tether C level executive who I have yet to find a serious conflict of interest for is Leonardo Real, the Chief Compliance Officer.

Ask yourself when was the last time you saw Tether executives or spokespeople pushed about these conflicts of interest, I have seen very little.

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Episode 23 — Binance: The Tai Chi Document — Crypto Critics’ Corner

~ Bennett Tomlin ~ Leave a comment
Episode 23 – Binance: the Tai Chi Document

Binance: the Tai Chi Document – Crypto Critics' Corner

Today Bennett Tomlin and Cas Piancey talk about the Binance Tai Chi document (which you can read about here https://www.forbes.com/sites/michaeldelcastillo/2020/10/29/leaked-tai-chi-document-reveals-binances-elaborate-scheme-to-evade-bitcoin-regulators/?sh=6dbafb302a92). This was recorded *before* Binance introduced full-KYC (know-your-customer) practices, but highlights previous issues with Binance, Binance US, and other Binance affiliated companies. If you're interested in the book by Evan Ratliff that we mention, it can be purchased here: https://www.amazon.com/Mastermind-Drugs-Empire-Murder-Betrayal/dp/0399590412

In this episode Cas and I discuss the Binance Tai Chi documents. A leaked set of documents as reported on by Forbes, which detail Binance’s plan to Binance US as part of a strategy of regulatory arbitrage. 

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Episode 22 — Blockchain Terminal with Robert Green — Crypto Critics’ Corner

~ Bennett Tomlin ~ Leave a comment
Episode 22 – Blockchain Terminal with Robert Green

Blockchain Terminal with Robert Green – Crypto Critics' Corner

Robert Green (@robogreen on Twitter), a marketing consultant who ended up doing contract work for Blockchain Terminal – a company claiming to be "the Bloomberg Terminal," but for cryptocurrencies! – joins us to discuss his time at the bold project. The main problem with the company? One of the biggest fraudsters in Canadian history was running things under a pseudonym, "Shaun MacDonald," and was planning his exit scam from day one (perhaps even laundering funds from a pervious scam to bootstrap the project). Tune in to hear the full story.

In this episode Cas and I are joined by Robert Green, a marketing consultant who had worked with Blockchain Terminal. Blockchain Terminal was a fraudulent cryptocurrency company who was claiming to build the “Bloomberg Terminal” of crypto. The biggest issue with the company is that it was run by a known fraudster named Shaun MacDonald who was hiding behind the pseudonym ‘Boaz Manor’. 

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Tether and Bitfinex Introduction

Featured ~ Bennett Tomlin ~ 4 Comments

Tether and Bitfinex Introduction – Bennett's Articles

Tether and Bitfinex are two of the most important companies in the cryptocurrency ecosystem. Tether is the largest stablecoin, and the primary driver of volume and liquidity. Bitfinex used to be the largest cryptocurrency exchange, and still is a frequently used exchange. Tether and Bitfinex have an incredibly problematic past and are quite possibly the largest corporate fraud in history. Read more: https://bennettftomlin.com/2021/08/08/tether-and-bitfinex-introduction/

Tether and Bitfinex are two of the most important companies in the cryptocurrency ecosystem. Tether is the largest stablecoin, and the primary driver of volume and liquidity. Bitfinex used to be the largest cryptocurrency exchange, and still is a frequently used exchange. Tether and Bitfinex have an incredibly problematic past and are quite possibly the largest corporate fraud in history.

Continue reading “Tether and Bitfinex Introduction” →

Episode 20 – Algorithmic stablecoins and regulation with Frances Coppola (Part 2) — Crypto Critics’ Corner

~ Bennett Tomlin ~ 1 Comment
Episode 20 – Algorithmic stablecoins and regulation with Frances Coppola (Part 2)

Algorithmic stablecoins and regulation, Part II featuring Frances Coppola – Crypto Critics' Corner

The second part of the two-part discussion with Frances Coppola. On this episode, Bennett Tomlin and Cas Piancey ask about algorithmic stablecoins, overcollateralized stablecoins, regulation, and historical precedent for pegged-currency failures.

In this episode Cas and I are joined by Frances Coppola to stablecoins and how they fit into the regulatory landscape. We also discuss some of the problems with algorithmic and partially collateralized stablecoins. 

You can find Frances’ Twitter here, her blog here, and her book here.

Note: This post contains an affiliate link to support the blog.

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Episode 19 – Inflation, deflation, and stablecoins with Frances Coppola (Part 1) — Crypto Critics’ Corner

~ Bennett Tomlin ~ 1 Comment
Episode 19 – Inflation, deflation, and stablecoins with Frances Coppola (Part 1)

Inflation, deflation, and stablecoins with Frances Coppola (Part I) – Crypto Critics' Corner

Frances Coppola – "infamous" nocoiner and author – joins Bennett Tomlin and Cas Piancey to teach everyone a thing or two about inflation, deflation, hyperinflation, and stablecoin regulation.

In this episode Cas and I are joined by Frances Coppola to discuss inflation and deflation along with stablecoins. 

You can find Frances’ Twitter here, her blog here, and her book here.

Note: This post contains an affiliate link to support the blog.

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Episode 18 – Crypto Charity: where you donate to random people making promises and get nothing in return — Crypto Critics’ Corner

~ Bennett Tomlin ~ 1 Comment
Episode 18 – Crypto Charity: where you donate to random people making promises and get nothing in return

Crypto Charity – where you donate to random people making promises and get nothing in return – Crypto Critics' Corner

Today's episode is guest-less! Just Bennett Tomlin and Cas Piancey discussing how particularly egregious cryptocurrency-based charities tend to be. Examples include Jacob Kostecki, Binance's Pink Care Token, and Deltec Cares.

In this episode Cas and I are discussing the problematic history of charities in the crypto space. 

I discuss Jacob Kostecki here:

A List of Facts about Jacob/Jakub Kostecki

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The Available Evidence that Tether and Bitfinex Committed Bank Fraud

~ Bennett Tomlin ~ 2 Comments

The Available Evidence that Tether and Bitfinex Committed Bank Fraud – Bennett's Articles

https://bennettftomlin.com/2021/07/26/the-available-evidence-that-tether-and-bitfinex-committed-bank-fraud/ Recently Bloomberg reported that several Tether executives (archive) have gotten ‘target letters’ for bank fraud from the Department of Justice. There is evidence that Tether and Bitfinex may have participated in bank fraud. We have several reasons to believe that Tether may have committed bank fraud starting by this video that was saved by Bitfinex’ed. We’ve had banking hiccups in the past, we’ve just always been able to route around it or deal with it, open up new accounts, or what have you… shift to a new corporate entity, lots of cat and mouse tricks. Sometimes those accounts get shut down because the correspondent banks realize this is Bitcoin related. The specific claim that Bloomberg is claiming is under investigation is that Tether may have misrepresented to banks their line of business and tried to hide that it was cryptocurrency related. I think the above quotes make it extraordinarily likely that Tether was doing exactly what they are accused of. Update: I forgot to mention the below story that the NYAG revealed. https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=vIexA1b0spKOnK_PLUS_ZUGTJ3A==&system=prod (Archive) (My copy) When the New York Attorney General filed their request for an ex parte order they revealed that for a period that Bitfinex depended on ‘friends of Bitfinex’ who would use their accounts to service withdrawals. It is very likely in my opinion that this was not fully disclosed to their banks. It is also important to remember that Bitfinex and Tether relied on Crypto Capital Corp to provide ‘Bank Fraud as a Service’. Crypto Capital Corp would misrepresent to banks that they were in real estate, while actually providing shadow banking services to Bitfinex, Tether, Kraken, Quadriga, Bitmex and others. They would also use fake bond certificates to claim to have more funds than they actually did, and the principal was arrested with counterfeited bills and the ability to issue more. It is thanks to this fraudulent behavior that Crypto Capital Corp was able to maintain banking relationships for the periods where they could. When Tether lost banking in 2017, they likely depended on Crypto Capital Corp. It would be Crypto Capital Corp eventually having their bank accounts seized that would lead to Bitfinex robbing hundreds of millions of dollars from Tethers account. Moral of the story, don’t lie to your bank.

Recently Bloomberg reported that several Tether executives (archive) have gotten ‘target letters’ for bank fraud from the Department of Justice. There is evidence that Tether and Bitfinex may have participated in bank fraud.

Continue reading “The Available Evidence that Tether and Bitfinex Committed Bank Fraud” →

A History of Tether and Bitfinex’s Audits, Attestations, Memos, and Letters: Both Promised and Actual

~ Bennett Tomlin ~ 2 Comments

A History of Tether and Bitfinex’s Audits, Attestations, Memos, and Letters: Both Promised and Actual – Bennett's Articles

https://bennettftomlin.com/2021/07/17/a-history-of-tether-and-bitfinexs-audits-attestations-memos-and-letters-both-promised-and-actual/ Amidst all the confusion surrounding Tether and Bitfinex it can be difficult to keep track of what they have actually provided in terms of audits, attestations, and other documents to support their contentions. Here I will summarize, but the important note that needs to be included at the top is that both Bitfinex and Tether once hired an auditor, but neither ever completed the audit. Ever since Tether was founded they have promised to provide a full financial audit. It feature prominently in their whitepaper and on their website for years. They have never provided this audit, but have provided a variety of other documents meant to convince the public that they had sufficient backing for the tethers in circulation. In March of 2015 Tether and Factom announced (archive) they had formed a partnership to provide greater transparency into Tether’s holdings. The partnership never provided any additional transparency into Tether or its operations. In August of 2016 Bitfinex promised (archive) to provide a full financial and security audit after they were hacked. They initially announced that Ledger Labs was hired to perform both. No audit from Ledger Labs was ever released. This was likely in part due to the fact that Ledger Labs was not able to provide financial audits. In May of 2017 Bitfinex announced (archive) they had engaged Friedman LLP out of New York to audit them. As of today in 2021 we have yet to get an update from Bitfinex on the status of this audit. In September of 2017 Tether announced (archive) that they had engaged Friedman LLP out of New York to audit them. This audit would never occur, we would eventually get an update from a Tether spokesperson saying the relationship dissolved, citing the “excruciatingly detailed procedures”(archive) that the auditor wanted to undertake. Also in September of 2017 Tether released from previous attestations from a small accounting firm in Taiwan called TOPSUN. These were monthly attestations attesting to Tether having sufficient backing for the end of the month from December 2016 through March 2017. Strangely these were not completed at the end of the respective months but were all completed on May 23rd 2017. (Strangely approximately two weeks after they announced that Friedman had been brought on to audit Bitfinex) Read more… https://bennettftomlin.com/2021/07/17/a-history-of-tether-and-bitfinexs-audits-attestations-memos-and-letters-both-promised-and-actual/

Amidst all the confusion surrounding Tether and Bitfinex it can be difficult to keep track of what they have actually provided in terms of audits, attestations, and other documents to support their contentions. Here I will summarize, but the important note that needs to be included at the top is that both Bitfinex and Tether once hired an auditor, but neither ever completed the audit.

Continue reading “A History of Tether and Bitfinex’s Audits, Attestations, Memos, and Letters: Both Promised and Actual” →