With a new bull run occurring in Bitcoin, it seems many people have forgotten exactly why there’s concern about what’s happening at Tether, so this is a short summary.
The Beginning
Tether is founded as “RealCoin” by Brock Pierce, Reeve Collins, and Craig Sellars. Upon founding, very little RealCoins, or Tether, are printed or listed on exchanges.
Next
A year or two after the RealCoin business is established, it is silently sold to the new exchange market leader, Bitfinex. At this point the name is changed to Tether. Once listed on Bitfinex, real volume — though still minimal — begins. Mentioned in the purchase are Giancarlo Devasini (CFO of Bitfinex), JL Van der Velde (CEO of Bitfinex), and Phil Potter (former CSO of Bitfinex). The only way the public finds out about the purchase is via the Panama Papers.
Bitfinex’ed and ““FUD””
Bitfinex’ed, an anonymous Twitter account and blogger, questions the goings-on at Bitfinex and Tether relentlessly. Bitfinex says they will sue the anonymous blogger because he’s hurting their business and making it impossible to get an audit. The lawsuit doesn’t materialize. Neither do any real audits or attestations.
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Tether Shows ““Proof of Reserves””
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I won’t go into depth here, but the TL; DR for these pie charts: does it look like 1–1 backed stablecoin — even if you give them the benefit of the doubt and account for cash equivalents? The answer is absolutely, positively no.
If you’d like a lengthier perspective on this disclosure, read the piece by myself and David Canellis or listen to Bennett Tomlin and I run through every aspect of it as quickly as we can.
That’s It
That’s where we are until cases move forward. Don’t let anyone tell you there’s been any “resolution” until there’s been actual resolution.
Stay skeptical, friends.