In this episode Cas and I were joined by David Z. Morris to discuss what Enron can still teach us.
In this episode Cas and I are joined by Rohan Grey to discuss money transmitters, CBDCs, stablecoins, and the best way to regulate that morass.
In this episode Cas and I are joined by Preston Byrne to discuss stablecoins, DeFi, regulation, and decentralization theater.
In this article I try to assess the currently available evidence that Bitfinex and Tether have committed bank fraud, it also includes an audio version, a new thing I’m trying out so let me know what you think.
In this episode of the Blockchain Debate podcast I discuss whether or not I think algorithmic stablecoins will ever work.
In this episode of The Daily Dive I discuss Bitfinex and Tether and get to specifically talk about the new information about their Department of Justice probe.
In this episode Cas and I discuss a variety of cryptocurrency charity scams and frauds.
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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.
Guests:Bennett Tomlin (twitter.com/bennetttomlin)Sam Kazemian (twitter.com/samkazemian)Host:Richard Yan (twitter.com/gentso09)Today’s motion is “Algo and fraction stablecoins are flawed.”A good stablecoin can sustainably hold its peg, and recover quickly from a premium or discount. This is a basic requirement for stablecoins. An obvious design is the bank coin model, where coins are backed 1-to-1 by fiat. But this creates a single point of failure and incurs compliance overhead. Hence MakerDAO, which made a smart contract driven stablecoin, and is de-coupled from the banking system. But it requires over-collateralization. So new designs popped up and tried to make the next capital-efficient stablecoin to allow under-collateralization, with innovative collateral adjustment mechanisms. We call these algorithmic and fractional stablecoins. Historically, most of these coins failed to hold their pegs. Is there a fundamental problem? Or can these challenges be overcome?The two debaters today include the founder of an algo/fractional stablecoin that has been holding its peg relatively well since launch, that is about half a year, as well as a well-known critic of various stablecoins.If you’re into crypto and like to hear two sides of the story, be sure to also check out our previous episodes. We’ve featured some of the best known thinkers in the crypto space.If you would like to debate or want to nominate someone, please DM me at @blockdebate on Twitter.Please note that nothing in our podcast should be construed as financial advice.Source of select items discussed in the debate (and supplemental material):Dragonfly research on FRAX stablecoin: https://medium.com/dragonfly-research/a-visual-explanation-of-frax-bcce72c1730fBennett Tomlin article on FEI stablecoin: https://bennettftomlin.substack.com/p/fei-protocol-analysis-last-reminderFrax stablecoin: https://frax.finance/Bennett Tomlin blog (mostly crypto): https://bennettftomlin.substack.com/Maker DAO's Black Thursday: https://medium.com/@whiterabbit_hq/black-thursday-for-makerdao-8-32-million-was-liquidated-for-0-dai-36b83cac56b6Guest bios:Bennett Tomlin regularly publishes articles about fraud in the crypto space via his blog. His dayjob is data scientist and fraud investigator in the pharmacy benefits area.Sam Kazemian is cofounder and CEO of Frax Finance, a stablecoin project that brands itself as the world's first "fractional-algorithmic" stablecoin. Sam also started Everipedia, the first decentralized online encyclopedia on the blockchain.
I returned to the Blockchain Debate podcast and in this episode I debated whether or algorithmic stablecoins are a valuable idea. I reference several different pieces of my work, so will drop the links to them below.
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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.
Lawyer Preston Byrne joins Bennett Tomlin and Cas Piancey for a wide-ranging discussion that goes from his own crypto journey (of skeptic to believer) to regulatory and legal risks for stablecoin operators.
Visit his Twitter to see more from Preston https://twitter.com/prestonjbyrne
In this episode Cas and I are joined by Preston Byrne of Anderson Kill Law to discuss stablecoins, his perspective on crypto, and the interplay between regulation and decentralized finance.
Bennett Tomlin and Cas Piancey are joined by Assistant Professor of Law at Willamette University and one of the authors of the STABLE Act, Rohan Grey. We discuss how stablecoins operate, what he hopes to see from CBDCs and the problems he sees in all kinds of new(er) money markets.
Find him on Twitter @rohangrey
In this episode Cas and I are joined by Rohan Grey, Assistant Professor at Willamette Law and one of the creators of the STABLE Act to discuss money transmitters, stablecoins, CBDCs, and the STABLE Act.