In 2017 Tether was issuing unbacked Tethers. This has been confirmed as part of their settlement with the New York Attorney’s General office. As an exercise in trying to ensure that I have not become overly biased around Tether what I will attempt to do in this article is construct the best case scenario for how Tether’s business was operating.Continue reading “The Best Case Scenario for Tether’s Activities in 2017”
Crypto Capital Corp is a licensed (in Panama (archive) [for one of the corporations]), unlicensed (My copy) (just about everywhere else) money transmitter and payment processor. They partnered with a variety of cryptocurrency companies including: Kraken, Bitfinex, Quadriga, Bitmex, Coinapault, and more. They are implicated in wire fraud, bank fraud, embezzlement, and hundreds of millions of dollars worth of money laundering for the Colombian cartels.Continue reading “What is Crypto Capital Corp?”
UPDATE: I MAKE THE CLAIM THAT BITFINEX LIED ABOUT OWNING TETHER, THIS IS TRUE BUT I WANTED TO PROVIDE ADDITIONAL CONTEXT HERE
Recently I was asked to do a guest lecture on Bitfinex and Tether. You can find it here: https://whu.cloud.panopto.eu/Panopto/Pages/Viewer.aspx?tid=f0fca2e9-f79e-4f81-b659-acd30078104e
My uploaded version:
You can find the slides here.
You can find the references here.
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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.Continue reading “A Timeline of Deeply Conflicted Tether Transactions”
You can find it here.
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 lawyeris 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.
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NOTE: THIS MAY BE UPDATED OR CHANGED AS I DEVELOP A BETTER PICTURE OF OWNERSHIP OF THESE COMPANIES, UPDATES WILL BE LABELED AS SUCH.
Havelock Investments was an early platform in the cryptocurrency space that allowed for a variety of companies to fundraise.
HAVELOCK INVESTMENTS MINING FUND – Havelock Investments Mining Fund was Havelock’s fund investing in Bitcoin mining.
SATOSHI DICE – Satoshi Dice was a game started by Eric Voorhees (archive). Satoshi Dice was a gambling service where you could send a Bitcoin transaction to a specified address and could potentially receive significantly more in response. Eric Voorhees was charged with offering unregistered securities for these sales of ownership in SatoshiDICE and FeedZeBirds. (archive)
CRYPTO CAPITAL CORP – Crypto Capital Corp is a payment processor, infamously used by Bitfinex, and with the principals under US indictment. Crypto Capital claimed that a significant portion of their assets are being held in Poland, Bitfinex’s lawyers claim to not believe this.
SANDSTORM – Sandstorm was an ‘investment fund’ which claimed to use the Bitcoins invested in it to make more money. It appears to have likely been an unsustainable high yield investment. You can find public copies of their ‘financials’ here. (archive)
5. Q3 2018 Financials (archive)] They now do white label cryptocurrency casinos. They are linked to Nessie (formerly at nessie.io (archive), now redirecting to crypto.eu) and MoneyPot (archive from when MonsterByte owned it) (domain now sold). I think it is valuable to remember that Stuart Hoegner (archive), the General Counsel for Bitfinex and Tether, is a “lead attorney to major bitcoin and altcoin poker brands”. It is unknown whether or not BitcoinRush/CasinoBitco.in/Monster Byte is among them.
RENTAL STARTER – This was an investment into a real estate fund that was investing in Ohio but was operated by Full Power Asia Investment LTD.
BIG TREND CAPITAL INVESTMENT – The listing on Havelock is not available. It is unclear what they did.
ALCHEMINER – Alcheminer was a company that created ASIC mining hardware.
SEVENTH CONTINENT – Seventh Continent was trying to create a bitcoin denominated marketplace. Their website is still live here. (archive) They were in part funded by the Lifeboat Foundation’s Bitcoin Endowment. Stuart Hoegner (archive), the General Counsel for Tether and Bitfinex was a member of the Lifeboat Foundation. (Archive of a cache of his bio on the page)
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Bitfinex is one of the historically largest Bitcoin exchanges and Tether is by far the largest stablecoin. Each potentially has significant influence over the industry on their own, and their interconnectedness makes this more of a concern. However, since both were founded years ago and many of the events have happened and been in revealed in bits and spurts it can be difficult to understand their place in the cryptocurrency environment. This will hopefully serve as a basic introductory document that will then prompt further research.Continue reading “An Introduction to the Tether/Bitfinex Controversy”
Crypto Capital is the money processor famous in both the QuadrigaCX case and the Bitfinex and Tether cases. Bitfinex famously handed them approximately $1 billion without even a contract. This is a list of companies who have worked with them for my own reference as I do research:
AirBEx – No longer open
MIMEX – No longer open
1BTCXE – No longer open (appears to have been owned by Crypto Capital)
Coinapult – No longer open
1EX.Trade – ‘There has been no trading activity in the last 24 hours’
MonetaGo – Appears to be still be open
Chip Chap – No longer open
Charna Crypto Exchange – No longer open
X-Coins – No longer open
WLOX (White Label Open source eXchange) – Last commit 7 years ago https://github.com/9cat/wlox
Kraken – Second largest United States exchange by volume (as this is being written)
Bitfinex – Well…
Decentralized Capital – Was a stablecoin, now closed
Bitt – Still open
Foxbit – No longer open
The Rock Trading – Still open
BTCC – No longer open
CEX.IO – Still open
Exmo – Still open