Tether is setting a New Standard for Transparency, that is Untethered from facts

13 min readJun 14, 2021
Tether being scrutinized on June 9th, 2021.

It has been a while since I’ve written a new blog post regarding our favorite subject, Bitfinex & Tether.

There have been other writers who have taken up the slack for my own lack of blog posts on Bitfinex & Tether, most notable are CasPiancey and Bennett Tomlin.

However, I probably should write one of my own, since I’m the one that started this whole mess. It would be a bit rude of me to start a big mess, and then just leave it for other people to write about it.

And oh boy, did I start a big mess or what?

This has been a four year rabbit hole of epic proportions. It has been quite extraordinary watching everything unfold. I started exposing Bitfinex & Tether back in April 2017.

Back in April 2017, I was armed with just a few small details about Bitfinex & Tether.

Those details were the following:

  1. Tether’s terms of service were absolutely ridiculous at the time (and they still are), and they explicitly denied any redemptions via TOS, ever, period.
  2. Audio recordings of Bitfinex executives admitting to bank fraud & money laundering.
  3. The knowledge that Bitfinex & Tether had no legitimate banking (Crypto Capital money laundering, indicted in April 2019)
  4. The fact that Bitfinex was founded by a Ponzi scammer.
  5. Tether’s refusal to conduct promised audits, in direct contradiction to Tethers own Whitepaper. Tether was promising everyone the Friedman LLP audit which inevitably never happened, apparently, auditing cash in a bank account is very difficult and complicated.

I didn’t quite have a smoking gun against Tether yet, but I had plenty of smoke. Every time I pointed out my facts, and that the Tether story didn’t make any sense, an army of Tether defenders (mostly just Bitfinex shareholders/paid social media manipulation firms and cryptofluencers), would claim that I had absolutely no evidence. That clearly wasn’t the case.

One of first big puzzle pieces I had was from Phil Potter, a Bitfinex/Tether executive and shareholder admitting to what arguably sounds like bank fraud & money laundering. That had the impact of a snowflake. That puzzle piece turned out to be quite important.

Exactly one year after that audio recording, in April 2018, Bitfinex lost roughly $400 million dollars in a Polish bank account.

The details of the bank account were published, along with proof that Bitfinex actually used that account.

Bitfinex, of course, denied the accusations, and publicly stated that the rumors were false.

About six months later, in October 2018, Bitfinex suddenly lost another $450 million dollars. On October 15th, 2018, the price of Bitcoin on Bitfinex shot up nearly $2,000 in fifteen minutes, with Tether falling to 85 cents or so.

Bitfinex of course, denied that anything happened and that it was all just FUD.

But meanwhile, the CFO of Bitfinex & Tether, was panicking privately to one of their money laundering banking providers on the same day they denied anything was wrong.

Source: NYAG Case

Who is Merlin? Giancarlo Devasini, the CFO of Bitfinex & Tether.

Source: NYAG Case

Since 2017, I stated that the collapse of Tether collapses the price of Bitcoin. The CFO of Bitfinex & Tether, actually agreed with me. That kind of situation is only possible, if Tether inflated the price of Bitcoin artificially.

The New York Attorney Generals court case against Bitfinex & Tether, was to force them to produce documents regarding the issuance and redemptions of Tether, among other things.

Obviously, Bitfinex & Tether didn’t want to produce these documents (it is my belief that the documents don’t exist or are woefully incomplete).

The New York Attorney General also made it public knowledge that indeed, Bitfinex lost $850 million USD, and covered it up. To quote the New York Attorney General:

“Bitfinex and Tether recklessly and unlawfully covered-up massive financial losses to keep their scheme going and protect their bottom lines,” said Attorney General James. “Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie. These companies obscured the true risk investors faced and were operated by unlicensed and unregulated individuals and entities dealing in the darkest corners of the financial system.

Bitfinex & Tether fought documents production for nearly two years, and even when they ultimately lost their appeals (unanimously, I might add) , they still dragged out their feet as long as possible for producing the documents. Ultimately, they were re-ordered by the court to produce what documents they had.

The New York Attorney General also made some additional revelations:

The OAG’s investigation found that, starting no later than mid-2017, Tether had no access to banking, anywhere in the world, and so for periods of time held no reserves to back tethers in circulation at the rate of one dollar for every tether, contrary to its representations. In the face of persistent questions about whether the company actually held sufficient funds, Tether published a self-proclaimed ‘verification’ of its cash reserves, in 2017, that it characterized as “a good faith effort on our behalf to provide an interim analysis of our cash position.” In reality, however, the cash ostensibly backing tethers had only been placed in Tether’s account as of the very morning of the company’s ‘verification.’

In other words, my claims in 2017 that Tether had no banking, turned out to be spot on. If Tether had no banking, and could not receive deposits for Tether issuances, then how could they be issuing Tethers backed by dollars in a bank account?

One might assume that perhaps the people buying Tethers, were just buying it by sending money to Bitfinex, and then Bitfinex gave them the Tethers… which is a good point.

Except that the New York Attorney General, states that didn’t happen:

NYAG Settlement

Between June 1st 2017 and September 15, 2017, Bitfinex only had two customers deposit USD into Bitfinex.

Effectively, the “largest Bitcoin exchange”, and where “price discovery was taking place, was just two customers.

Two traders.

And neither of them bought any Tether.

And Tether issued hundreds of millions of dollars worth of Tethers, with no banking, and nobody purchasing them during that period.


Magical Tethers, with no banking and no buyers. Spontaneously Habitually Issued Tethers.

It made a little bit of sense for people to attack me in 2017, while the evidence I had at the time was a little circumstantial, and certainly showed that Tether was suspicious, at the time I was simply a random asshole on Twitter spreading information.

However, the random asshole on Twitter, had a bunch of their claims validated by the New York Attorney Generals investigation, and my blog posts also made an appearance in the documents made public by the New York Attorney General, apparently I was “their guy”.

The largest Bitcoin exchange worrying about a “stupid” Twitter “FUD” account.

I was no longer just a random asshole on Twitter. I was a random asshole on Twitter that was right, and Bitfinex clearly had me in their sights, apparently Bitfinex & Tether cared a lot about somebody they publicly alleged was wrong about everything.

Another fascinating thing about the New York Attorney Generals investigation, was after it became public that Bitfinex & Tether lied about their reserves, their attorney, Stuart Hoegner stated that Tethers were only backed by $0.74 for every $1, after years of stating the opposite.

Literal admissions that Tether wasn’t fully backed, but the price of Tether remained at a dollar, and nobody tried to redeem any Tethers from Tether.

Strange. “Bitfinex’ed was right”, but apparently nobody cares.


And the so-called “community” rallied around to their defense. Bitfinex went on to allegedly raise $1 billion with the help of a Zhao Dong, a Bitfinex Shareholder that’s also now a convicted Chinese money launderer that’s serving a prison sentence in China, for… you guessed it, money laundering for crypto exchanges.

Bitfinex & money laundering seem to go together like Peanut Butter & Jelly.

The evidence against Bitfinex & Tether is substantial

The small cracks in the Bitfinex/Tether story that I found in 2017, has exploded into an ocean of evidence against Bitfinex & Tether, yet despite all of the evidence against them, people still want to believe Bitfinex and Tether, or give them the benefit of the doubt.

Bitfinex & Tether shareholders and supporters attacked me and called me the liar, when the reality was Bitfinex & Tether were the liars. It’s no wonder why Bitfinex, Tether, and their shareholders so rabidly attacked me. They knew their own vulnerabilities.

From June 2018, we have had the academic paper “Is Bitcoin Really Untethered”, by John Griffin. This paper made it into the Journal of Finance. I’m in a footnote on page three. The paper alleges market manipulation by, Bitfinex & Tether (or close associates), via Tether printing unbacked Tethers. Since the paper came out, unbacked Tethers have since then been proven, by the New York Attorney General.


Most importantly, the Journal of Finance and a professional academic paper probably is a little bit more convincing than a random asshole on Twitter.

However, despite this paper coming out, and making it into the Journal of Finance, the Bitcoin community simply ignores it, treating it the same as if it was a random asshole on Twitter.

Strange. The cryptocurrency community chooses to believe proven liars, instead.

In November 2018, it became public that Bitfinex & Tether are under criminal investigation by the Department of Justice, just after their October 2018 seizures, not surprisingly, Bitfinex have not recovered those funds, either.


However, that also was pretty much ignored the same as if it was posted by a random asshole on Twitter.


So, in 2018 we have a professional academic paper come out that concludes Tether shenanigans, and a DOJ Criminal Investigation into Tether… but the cryptocurrency community still shouts “FUD”, and allegedly people keep sending their billions of dollars to Tether.

Bitfinex & Tether start to issue tens of billions of new Tethers, and the crypto currency bull market suddenly comes roaring back to life throughout 2020 and 2021.

Even though Tether has competitors which are not publicly known to be under criminal investigation, and have not yet been proven liars… Tether is reporting that so-called “investors” are now sending tens of billions of dollars to them… to buy Bitcoin… as opposed to… just buying Bitcoin. Why not use a competitors stablecoin?

What is so special about Tether that investors choose Tether? All stablecoins should have the same price, right? $1.00. (Hint: The answer is, leverage, Tethers are cheaper than a dollar.)

Tether now claims over $62 billion dollars in so-called “reserves”.
Tether, the ‘stablecoin’ that lied about their reserves in 2017, remains the biggest ‘stablecoin’ of them all.

However, some things remain from 2017… Tether claims to have $62 billion in reserves, but still cannot perform a simple audit of their balance sheet.

Hundreds of millions of dollars of free interest payments every year, but can’t conduct an audit.

Part of the settlement agreement with the New York Attorney General, forced Tether to produce a breakdown of their reserves. Tether had 90 days to complete the breakdown of their reserves.

Everyone was waiting with bated breath. May 19th was the deadline.

“Bitfinex’ed is going to get REKT when Tether publishes the breakdown of the reserves! FUD DESTROYED!”

Just prior to their 90 day deadline, Tether produces the breakdown of their so-called reserves, and expectedly, my “FUD” is shot out of the water and I’m forever just a random asshole on Twitter that was butthurt and wrong about everything… or was I?

Short and uninformative.

Tether produces a single page breakdown of their so-called “reserves” a pie chart apparently constructed by a forth grader after spending ten minutes learning Excel for the first time, and the majority of Tethers are allegedly backed by so-called “Commercial Paper”.

So here’s a thought experiment. If Tethers reserves were good, they would have been producing a breakdown of their reserves voluntarily since 2017, especially as a way to combat relentless assholes on Twitter criticizing them.

Nothing actually prevented them from doing this before. It’s not an audit, but it shows some transparency, but they refused to do this until forced to by the New York Attorney General.

Why didn’t they do this before? Because Tether knows that the professional financial community, is going to be able to figure out they’re lying. It sets off fuse for them, and that fuse is burning.

It’s my belief that Tethers reserves are junk. Tether not disclosing the commercial paper they own is suspicious, especially in light of their known history of deception.

Tether could have produced a breakdown of the reserves showing who they are loaning money to, what commercial paper they own, what bonds they own, etc. They had 90 days to put together something substantive.

A ‘stablecoins’ reserves should be in safe assets, and people seeing those assets shouldn’t cause anything bad to happen.

Tether clearly doesn’t want to do that, and it’s for a good reason. Here’s why:

In May, it provided a breakdown of these reserves, which Tether claims included just under $30bn in commercial paper, a short-dated investment similar to cash. Such holdings of companies’ short-term debt would make it the seventh largest in the world. But this reported accumulation has largely gone unnoticed on Wall Street, according to several of the biggest players in the market including bank traders, analysts and money market funds. “We’ve got lots of inquiries and heard lots of discussion, but have not seen any active participation,” said Deborah Cunningham at Federated Hermes. “Until last week we hadn’t really heard of them,” said a trader at a large bank. “It was news to us.”

Tether reported that it’s one of the largest purchasers of commercial paper, but the traders in the commercial papers markets, are not seeing Tether participating in the US commercial paper market.

If Tether didn’t have to reveal what the make up of the reserves are, this would not be possible to discover. Tether knows this, which is why they refused to be transparent, until they were forced to.

What commercial paper is Tether buying? This is akin to Bernie Madoff Investments, a financial investment firm, that doesn’t make any trades…

Throughout Tethers history, every time they did not want to show something, we eventually found out why they didn’t want to show it. They didn’t want to do an audit in 2017, because they didn’t have a bank account and were comingling funds, along with banking with a now indicted money launderer currently being prosecuted by the Department of Justice.

It’s my opinion that they do not want to show the breakdown of the commercial paper, loans, and so on, is because whatever is in there, if anything, would be catastrophic for them.

If it was good, they’d show us. If Tether was running a legitimate operation, they’d want nothing more but to put this issue to bed for once and for all.

Tether’s General Counsel: Delusional Statements

In May 2021, the General Counsel for Tether, Stuart Hoegner, put out a statement regarding the New York Attorney Generals investigation

Source (Archive)

One of his most egregious statements is the following:

Stuart Hoegner Statement (Bitfinex/Tether General Counsel)

Stuart Hoegner, who to the best of my knowledge, is still the General Counsel for Tether and Bitfinex, issues a statement that the New York Attorney General made no negative findings whatsoever that Tethers were not fully backed, nor ever issued without backing.

Let’s hop on over the New York Attorney General Website, and see if that’s true.


It appears what we have here, is the General Counsel for Tether and Bitfinex, Stuart Hoegner, making instantly verifiably false statements regarding the New York Attorney Generals investigation.

And they want you to believe that so-called crypto investors sent them $62 billion dollars to buy Tether to buy Cryptocurrencies.

Also, it appears that the General Counsel for Bitfinex & Tether, may have accidentally violated the settlement agreement.



While everyone is out there parsing Tethers disclosures about their reserves, it’s important to note that their attorney, Stuart Hoegner, appears to continue to make false statements to the public.

For this reason, I do not believe that their so-called disclosures, are worth the paper they’re not printed on.

And the financial community is figuring that out, because it’s clear to them that they aren’t seeing Tether buying tens of billions of dollars of US commercial paper.

Tether was also featured on Jim Cramer's show, Mad Money, with former CFTC Chairman Timothy Massad. Tether was compared to Lehman Brothers.

The false statements by Tether are absolutely incredible, and it’s mind boggling to me that anybody believes anything that they say.

Tether is getting significantly more reporting by mainstream financial sources, such as the Financial Times, CNBC, Bloomberg, etc. Their fraud is too big to hide anymore. Seeing Tether being talked about on CNBC was unreal.

It’s happening.

And to think, it was all started by some random asshole on Twitter.

Trade Carefully





Blog for @Bitfinexed on Twitter. Exposing possible fraud by largest Bitcoin exchange, Bitfinex/Tether