Tether is setting a New Standard for Transparency, that is Untethered from facts
By: Bitfinex Ed
Tags: Tether, Bitcoin, Bitfinex, Cryptocurrency, Fraud

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.

Strange.

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.