The Available Evidence that Tether and Bitfinex Committed Bank Fraud
Channel: Bennett Tomlin
Date: 2021-07-30

Read More: 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.