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 discussing the problematic history of charities in the crypto space.
In this episode Cas and I are joined by Frances Coppola to discuss inflation and deflation along with stablecoins.
This one will be a little bit longer than normal because I was in a wedding last weekend and did not get that week’s post up.
Books I Read
Dolores Clairborne – A fascinating King novel that focuses exclusively on a single woman and the people she did and did not kill as it steps through her life.
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 Daily Dive I discuss Bitfinex and Tether and get to specifically talk about the new information about their Department of Justice probe.
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.
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.
From Skeptic to Believer: Preston Byrne on the cryptocurrency ecosystem –
Crypto Critics' Corner
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.
Today Bennett Tomlin and Cas Piancey are joined by David Z. Morris to discuss what happened at Enron, the ramifications of its downfall, and how the climate during Enron relates to today.
If you'd like to hear more from David visit his website http://www.davidzmorris.com/
his twitter profile https://twitter.com/davidzmorris
or subscribe to his substack http://davidzmorris.substack.com
In this episode Cas and I are joined by David Z Morris of Coindesk to discuss Enron and how we think this relates to the current cryptocurrency ecosystem.
Janet Yellen is getting together a whole bunch of regulators and law enforcement to figure out what the heck is happening with stablecoins.
ICYMI
I was able to go on the Grant William’s Podcast to discuss Bitfinex and Tether and he has also made his report on Tether and Bitfinex freely available.
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.
