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Podcast: ‘Target Letter, Tether’ (Amy Castor and David Gerard)
I did a podcast for “When the Music Stops” with fellow crypto skeptic David Gerard, where we discuss the Justice Department’s criminal probe into Tether. You can also listen to the podcast on Spotify and Apple Podcasts.David and I talk about what the DoJ probe means, why they may have leaked the info to Bloomberg, and take a guess as to when Tether may have gotten a “target letter” from federal prosecutors. (Hint: probably about the tim...
The DOJ’s criminal probe into Tether — What we know
Early this morning,Bloomberg reportedthat Tether executives are under a criminal investigation by the US Department of Justice.The DOJ doesn’t normally discuss ongoing investigations with the media. However, three unnamed sources leaked the info to Bloomberg. The investigation is focused on Tether misleading banks about the true nature of its business, the sources said.The DoJ has been circling Tether and Bitfinex for years now. In November 201...
News: Regulators zero in on stablecoins, El Salvador’s colón-dollar, Tether printer remains paused
MyPatreonaccount saw seven new subscribers this month, so far. Thank you! Your support is a big deal. It helps me keep doing what I’m doing.If you like my writing enough to buy me a cup of coffee now and then, you can sponsor this blog for $5 a month — or $20, $50, or $100 a month, if you want to help out with more than just coffee. Every little bit makes a difference.Here’s what’s happening in the land of crypto.RegulationsA new academic...
Binance: Italy, Lithuania, Hong Kong, all issue warnings; Brazil director quits
Ever since Germany’s BaFin and the UK’s FCA issued warnings against Binance, the dominoes have continued to topple. Global regulators are fed up with the world’s biggest crypto exchange.This last week, three more jurisdictions issued warnings about Binance’s tokenized stocks, joiningseveral othersin voicing their concerns about the exchange.In apress releaseon Thursday, Italy’s market watchdog Consob warned investors that Binance and it...
Binance: Fiat off-ramps keep closing, reports of frozen funds, what happened to Catherine Coley?
Last thing I remember,I was running for the door.I had to find the passage backTo the place I was before.“Relax,” said the night man,“We are programmed to receive.You can check out any time you like,But you can never leave.”~EaglesBinance customers are becoming trapped inside of Binance — or at least their funds are — as the fiat exits to the world’s largest crypto exchange close around them. You can almost hear the echoes of doors ...
What’s backing Circle’s 25B USDC? We may never know
Jeremy Allaire is taking his Boston-based company Circle public via a SPAC. Circle is best known for its stablecoin USDC, which now has a market cap of $25.5 billion.In all his press interviews talking up the future potential of stablecoins — “Circle sits at the center of the next major transformation that the internet is bringing to the world,” he said in aninvestor websitevideo — there is one question Allaire consistently avoids giving ...
Reggie Fowler, man at the center of Tether’s missing funds, ready for trial
It looks like Reginald Fowler, the man tied to hundreds of millions of dollars of missing Tether and Bitfinex money, has ditched plans for renegotiating a plea deal. Instead, he is planning to head to trial.In aletterfiled with the New York Southern District Court on July 7 on behalf of both parties, the government stated: “The parties are not currently engaged in plea negotiations and do not anticipate resuming negotiations.”Prosecutors are ...
News: Tether printer on hold, China’s crypto crackdown, the world hates Binance, El Salvador’s Chivo wallet
In case you missedmy tweet,I ended up sick at the end of June. I was chatting with a friend over Zoom when he noticed that I was tilting over in my chair. Was I drunk? No. Should he call an ambulance? I’m fine.I ended up in the ER the next day on IV fluids and hooked to monitors. Turns out I hadAnaplasmosisfrom a tick bite. Doxycycline did the trick, and I was on my feet again within 48 hours.Apparently, this is the price you pay for walking bl...
RSA Conference goes full blockchain, for a moment
RSA Conference,arguably the world’s largest gathering of computer security experts, surprised everyone Saturday night when it suggested replacing the entire internet with — a blockchain.“The Internet has a serious fundamental flaw: the transmission control protocol/internet protocol (TCP/IP) — the primary engine underpinning the Internet — is less secure. Is#blockchainthe solution we need to eliminate this flaw?” RSA Conferencetweeted...
Binance: A crypto exchange running out of places to hide
Binance, the world’s largest dark crypto slush fund, is struggling to find corners of the world that will tolerate its lax anti-money laundering policies and flagrant disregard for securities laws.On Thursday, the Cayman Islands Monetary Authorityissued a statementthat Binance, the Binance Group and Binance Holdings Limited are not registered, licensed, regulated or otherwise authorized to operate a crypto exchange in the Cayman Islands.“Foll...
Michael Peterson, El Salvador, and Bitcoin Beach
On June 8, El Salvador passed a law to make bitcoin legal tender, alongside the dollar. Salvadorans were blindsided by the decision. Overnight, their president, Nayib Bukele, had turned into a bitcoiner, even adopting thebitcoin laser eyesin his Twitter profile — he andmembers of his cabinet, too.Who sold Bukele on the plan? Many believe it was Michael Peterson, a 47-year-old white evangelical from San Diego.Peterson is behind theBitcoin Beachp...
NFTs and money laundering, the perfect storm
In June, I wrotea story for Artnet(paywalled) describing how NFTs create new opportunities for bad guys to move money without attribution. Read the full story if you can. Otherwise, here are some of the points I touch on along with additional notes. The physical art world has a money-laundering problem — it is a secret world where expensive pieces are often bought and sold anonymously. Art is subjective, so it’s easy to justify spending milli...
Rehost: A day in the life of Stuart Hoegner, General Counsel for Tether
One of my favorite Tether skeptics, Trolly McTrollface, had to take down a parody post about Stuart Hoegner today.Trolly received an email from his hosting service this morning warning him that he had committed some kind of copyright infringement. (It’s not clear that he did, but Trolly doesn’t have oodles of time on his hands to fight this, and it was easier to simply take down the post.)According to theactual complaint, Trolly was abusing t...
News: Tether—now 3% backed, Binance under investigation, Bitfinex shareholder charged, fickle Elon Musk
I’ve been inconsistent with my newsletters lately because I’m struggling to write this dang NFT book. It is slow going, and I keep falling down these rabbit holes. I feel like if I don’t hurry, the entire crypto market will collapse and NFTs will become a distant memory. Nevertheless, next week, I’ll begin publishing drafts of chapters on Patreon. You can subscribehere.Tether has so far issued58.5 billion tethers—8 billion in the first ...
Tether’s first breakdown of reserves consists of two silly pie charts
Tether, the world’s most popular stablecoin issuer, releaseda breakdownof the composition of its reserves backing tethers on May 13.The breakdown is no surprise to Tether followers: Two lame pie charts showing, at best, only a fraction of assets are in cash, and the rest are in risky assets.Specifically, this is a breakdown of the composition of Tether’s reserves on March 31, 2021, when Tether had roughly 41.7 billion tethers in circulation. ...
News: Tether surpasses 50B, Coinbase lists USDT, reported $2B crypto scam in Turkey
Bitcoin is sitting at around $54,000, and Tether has hit a new milestone:50 billion tethersin circulation, something it’squite proud of.“Will we reach $100B before 2022?”So far, in April, Tether has issued 9 billion tethers—and the month isn’t even over yet. Tether has been minting2 billion tethersat a time—the largest single batches we’ve seen to date.Perthe NY AG settlement agreement,Tether is supposed to provide a breakdown of it...
Coinbase lists tether, the world’s dodgiest stablecoin
Coinbase, the largest crypto exchange in the U.S., justannouncedit is listing tether (USDT), the world’s dodgiest stablecoin.Tethers, for the uninitiated, are a stand-in for real dollars, used mainly on offshore crypto exchanges that can’t get proper banking. Now tethers can be found on Coinbase, a banked exchange—overseen by the SEC.The timing of this is incredible, only a week after Coinbase debuted on Wall Street.Nobody knows for sure wh...
News: Coinbase Q1 earnings, Signal integrates MobileCoin, GBTC premium in the toilet, Reggie Fowler’s new lawyer
Bitcoin rose above$60,000 again.It only took 6 billion tethers to make that happen sincethe last time it hit $60,000in March—less than a month ago. We now have44.5 billion tethersin circulation.Coinbase set to debut on NasdaqEverything looks rosy for Coinbase’s debut on Nasdaq on April 14. The company is worth $91.5 billion, securities filings show. It reached that valuation even before releasing Q1 results of $1.8 billion—9x that of a year...
Signal adopts MobileCoin, a crypto project linked to its own creator Moxie Marlinspike
Many technologists today were disappointed to learn that Signal, an encrypted messaging service, is adopting MobileCoin (MOB), a new cryptocurrency that wentlive in December,for payments.Signal is hugely popular in the tech world. I use it, and many of the people I correspond with use it as a safe and secure way of communicating. And many prefer it over WhatsApp and Telegram.Now, the non-profit wants to take that next step of becoming a payments ...
News: I’m writing a book, people are minting NFTs for the lulz, Chuck Tingle calls NFTs a ‘scoundrel plot’
I’m working on a book on NFTs and how they became the tulip mania of crypto. As of now, the plan is to self-publish on Amazon, hopefully before the bubble explodes likethis dead whale.I’ve finished the outline—which I’ll continue to update in coming weeks—and I’m playing with ideas for a catchy title.If you have thoughts for a title, send them to me! I need as many ideas as possible. Only one rule: it has to be SEO-friendly, so we nee...
BitClout’s social media experiment is one bad idea on top of another
BitClout, a social-media-on-the-blockchain project, is selling a type of token (called “creator coins”) tied to influential Twitter accounts—without account holders’ permission.And folks are getting understandably pissed off.At first, I thought these creator coins were NFTish due to their artificial scarcity and being a way to trade influence. But it turns out they are moreHYIPish.Creator coins are fungible, similar to ERC-20 tokens on Et...
News: Metakovan unmasks himself, FATF goes after DeFi and NFTs, Coinbase pays CFTC $6.5M over wash trades
I’ve been traveling the U.S., visiting friends on the East and West Coasts and in between, and this is my first newsletter in a few weeks.This week has been a busy one, full of interviews and talking to reporters about nonfungible tokens. Who knew NFTs would become this big? I’ve gained nearly a thousand more Twitter followers andseveral more patrons,which is wonderful because I can certainly use the support.Peanut exploring a stream in Texas...
WTF is an NFT?
NFTs are all over the news lately.Recently, I was having drinks with a friend, who knows zip about crypto, and out of the blue, she started asking me about “non-fungible tokens.”The next day, a musician friend posted an amateurish drawing of a guitar on Facebook, proudly announcing, “This will soon be available as an NFT.”If initial coin offeringswere the crypto grift of 2017 and decentralized finance (aka “DeFi”) was the grift of 202...
Metakovan, the mystery Beeple art buyer, and his NFT/DeFi scheme
Last week, a crypto whale going by the moniker “Metakovan” bought a Beeple artwork via Christie’s auction for $69 million—$60 million in ETH and $9 million in fees—outbidding a surprised Justin Sun, founder of the Tron blockchain, in the last minute.After the barest amount of digging, I am going to hazard a guess that the mystery Beeple buyer is Vignesh Sundaresan, a crypto entrepreneur who has been in the crypto landscape for about sev...
Another QuadrigaCX documentary in the works
Dear Patrons,I just wanted to drop a note and thank you all for your kind support— and share some news.I’ll be in another film!I’m filming for another QuadrigaCX documentary on Saturday.I can’t tell you much more until an official announcement about the film comes out, but I’ll try and post photos—if and when I can.The filming will be all day. It’s completely exhausting getting ready for this, because now, in the midst of COVID, I s...
NYAG to crypto companies: ‘Play by the rules or we will shut you down’
The New York attorney general issued a stern warning to crypto companies and crypto investors on Monday. Crypto firms doing business in the state must play by the rules or face consequences, she said. And to investors, she underscored the hazards of dabbling in the crypto markets.The two-part warning from NY attorney general Letitia James comes on the heels of asettlement agreementwith Bitfinex and Tether, wherein the two closely related companie...
News: NY gives Tether the boot, Tether leaks, Coinbase financials, MoneyGram dumps Ripple
February is coming to an end. I’m waiting to get vaccinated, so I can travel without worry again. Maybe I’ll go to some crypto conferences later this year? I still havefond memoriesof Coindesk’s Consensus in May 2018—when you could hear the rumble of lambos coming through midtown Manhattan—and sitting in a coatroom with scant Wifi and a broken water cooler. (It was a big coatroom, but a coatroom nonetheless, and that’s where non-Coind...
NY AG/Tether, Bitfinex settlement reveals commingling of funds, years of shenanigans
I wrote aquick articlethis morning about the New York attorney general settlement, wherein Bitfinex and Tether agreed to pay $18.5 million in penalties, stop servicing New York customers, and submit quarterly transparency reports.But there are more details to highlight. Namely, thesettlement agreementreveals the games Bitfinex and Tether have played over the years—games they will keep on playing until someone puts an end to their shenanigans.It...
Tether, Bitfinex to pay $18.5M to NYAG, cease trading in NY
Bitfinex and Tether have settled with the office of the New York attorney general in an investigation that began two years ago.The sister companies will pay $18.5 million in penalties to the state for violations of the Martin Act, according to astatementissued by the NY attorney general. Per the terms of thesettlement agreement, Bitfinex and Tether are banned from trading in the state and must submit quarterly reports to ensure they are complying...
News: MicroStrategy needs more cowbell, Tether surpasses $34B, those laser eyes, Tether collapse doomsday scenario
I nearly ventured to Austin Wednesday, but my flight was canceled due to the storm, havoc, and general disaster in the area. I found another flight later in the day and was headed out the door, when I thought, nah. Turned out to be a good decision, since I probably wouldn’t have survived more than a day without wifi.Last week, Tether issued another 2.2 billion tethers, so you can buy bitcoin with real cash at a higher price. As of today, Feb. 2...
