On November 1st 2018 Tether proudly proclaimed that they were once again banked, this time with Deltec Bank in the Bahamas (archive). This announcement included a letter (my copy) (archive) signed by someone associated with Deltec that stated that Tether had a ‘portfolio cash value’ of $1,831,322,828 on October 31st. This suggested to all that Tether had the value to back their tethers.
I had a ton of fun recording this podcast, however, due to time constraints I was not able to get to all my notes on whether or not Tether acts in good faith. I would like to summarize a few of the things I was not able to get to here:
Bitfinex has used the bank accounts of friends and family of Bitfinex in order to service withdrawals.
The firm who provided Tether’s last attestation is no longer operational, and Freeh, one of the lawyer behind it UPDATE:is no longer a lawyer is no longer practicing law, but may still be licensed.
Tether advertised no KYC swaps between Bitcoin and Tether.
Tether held tens of millions of dollars in the bank account of their General Counsel.
The founder of Bitfinex was promoting ponzis right up until he announced Bitfinex.
The founder of Bitfinex once described his own exchange as a bucket shop.
There are many more, but I just wanted to give you a taste of some of the stuff we ran out of time to get to.
I wrote about a deeply exploitive scam called The Billion Coins. Unfortunately, that coin is still active and is still taking advantage of people. They have tried to rebrand to make themselves look more official, but are still the same group of scum.
I once wrote about a worthless token called slidebits. Now the creator himself removed the blockchain from his app.
I wrote an article presenting a bearish case for a token when I was applying to a crypto hedge fund. That token has a market cap 1/10 of it’s all time high. Though I must admit, it has not seemed to be affected by any of the issues I pointed out. Sometimes things just break your way.
UPDATE: This was refiled presumably as part of the formal movement from the Supreme Court back to trial and the actual decision came down in July. Thank you to Rob Stevensfor reminding me of this fact.
There was finally a new development in the long delayed Digfinex/iFinex/Bitfinex/Tether NYAG case. The New York State Supreme Court heard the appeal from Bitfinex and unanimously decided to send them back to trial, dismissed their motion to dismiss, and reaffirmed that they need to supply the ordered documents.
I will review the document below.
The judges lay out initially that this appeal was absolutely meaningless from the start, and nonetheless take the time to lay out why each of Bitfinex’s arguments are invalid.
They begin (as shall I) with Tether’s argument that it is neither a security or a commodity and as such these activities surrounding Tether are not covered under the Martin Act. The judge strongly disagrees.
The first point laid out here is explaining that Bitfinex did not appeal correctly to challenge the NYAG jurisdiction, and instead in effect were trying to appeal the right of the Supreme Court to hear an application for this type of order.
The second point follows along with this one to emphasize that they did not appeal the order they appear to have a problem with.
The third point, is laying out even if they had handled this appeal correctly Tether would still be found to be covered under the Martin Act.
After settling the issue of whether Tether was neither a commodity a security they addressed the argument by Bitfinex that the New York Supreme Court lacked personal jurisdiction. In this argument Bitfinex tried to claim that there was insufficient link between their activity in New York and the alleged fraud. The judge did not find this argument convincing at all.
The first point that the judge emphasizes is that a single transaction is sufficient for their to be jurisdiction. They further affirm that since the investigation now centers around a fraud perpetrated by deceit about backing that it would affect the New York traders/Tether holders.
The judge then conveniently reviews for us some of the many ways that Bitfinex/Tether are tied to New York. Namely: they had traders in New York, they had traders in New York even after allegedly banning traders from New York, they had an executive working in New York (Phil Potter), the New York based executive they had specifically collaborated with other businesses who were based in New York, and finally that they hired multiple other firms in New York.
Even after thoroughly pointing out that Tether was deeply linked to New York, the judge elected to continue and point out that generally as long as there is sufficient evidence of some connection they will allow for an order like discovery to go forward in order to determine the extent to which a connection exists.
The final argument that Bitfinex has trotted out several times is that they were not served properly. The judge clearly points out that this is a ridiculous claim, and that Bitfinex’s counsel who had been working with the New York Attorney General during the investigation was served by hand, email, and overnight delivery.
In conclusion, this case has been moved from the appellate court back to trial, Bitfinex and Tether must hand over the documents requested, and they are now in an extraordinarily difficult position.
So a while ago I wrote a post bemoaning what I felt was a lack of writing tools that truly fit my workflow. However, I have recently found one that finally feels right to me. It is called Dendron and it has helped me immensely. It is a hierarchal note taking tool, that also allows easy linking to other notes and other content that you put into it. It has the ability to add metadata to the notes using something called Frontmatter. It is built on top of VS Code so it feels comfortable for me to hop into it to write, and perhaps most importantly it is built on a directory of local markdown files.
This last feature is increasingly important to me as I see a variety of cloud services shut down, or sunset old products. An open source note taking tool that works on widely accepted file types is built with longevity in mind, and for writing projects, and especially for research I want that long last ability.
Features I am still missing:
Better mobile editing experience: Because it is text files, I use Gitlab to track them, and so can edit and refer to them while on the go, but it does lose the ability to easily follow links
Automatic citation generation: I would love to write a script where I could add metadata to a file, and then when I link to it on ‘chapter’ documents, I would be able to automatically generate a citation
Automatic generation of ‘final’ products. Scrivener and other tools provide ways to take your text with all of your footnotes, and endnotes and everything and ‘finish’ it down to a variety of formats. This lacks that.
This tool has a bit of a learning curve, but despite that it was deeply integrated into my workflow within the space of a single day.