Tether Scam To Collapse Bitcoin & The Crypto Market In February?
If you follow my blog you may know that I have predicted that Bitcoin will fall to $1,000. I even wrote a serious article for a major financial news website. You can check it out here, as a bonus I got to mention Steem and Steemit as what to look for in an innovative token.
Like @jerrybanfield, I am “all-in” on STEEM even though I think the Bitcoin crash will bring down the entire market. But I am a long-term investor and I can use my STEEM to increase my holdings in the crypocalypse.
But what is going to be the catalyst to drop Bitcoin? No surprise here, it will be Bitfnex and Tether.
I'm not going to go over the same points that I have seen here on Steemit before. Well, not ALL of them.
- Tether is not backed by USD.
- Tether has been printed like crazy.
- Every time Tether is created, Bitcoin gets a price bump.
- Tether has gone from 800 million coins to 2.2 billion in two months.
- Tether has no major bank relations. Wells Fargo (the guys who had no problems creating fake customer accounts) was the last one. Tether is too sketchy for them.
- Bitfinex's mystery CEO is also Tether's as well.
- Tether states they are registered in Hong Kong. The Panama papers show them as being registered in the British Virgin Islands (same as Bitfinex) and the corporate address is a random house in Canada.
- Bitfinex takes USD but only pays out USDT (Tether)
Tether is NOT backed by any USD
Contrary to what they say, there is no 1-to-1 USD backing. The last full audit was back in March of 2017 when they had just $44.7 million in Tether.
They have a partial audit shown on their website from September. Extremely basic info and it is mostly blacked out. They try to pass it off as a real audit, but it is not.
This past weekend they fired the new auditor, Friedman LLP.
"Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable time frame,"
Yeah, right. They actually wanted to see the funds (which there aren't) and so they had to go.
Guys, if they really had the money to back it up it would be so easy to prove. That is what legitimate businesses do. Bitfinex and Tether are not legitimate.
Tether is being printed like crazy
Here is how much Tether has been 'poofed' into existence in January alone.
- January 4th - $100,000,000
- January 14 – $50,000,000
- January 16 – $100,000,000
- January 17 – $100,000,000
- January 18 – $100,000,000
- January 19 – $100,000,000
- January 20 – $100,000,000
- January 23 – $100,000,000
- January 31 – Created then destroyed $30,000,000
Total in January - $750,000,000
With no major banks behind them, where are they getting that much cash? Hint: they aren't.
Tether has gone from 800 million coins to 2.2 billion in two months. The law of diminishing returns shows that they have to print more and more to hold up Bitcoin.
That can't end well.
There is also a brand new wallet created on 31 January that is holding $200M in Tether. Watch that wallet as when the Tether is transferred out I bet there will be a Bitcoin bump.
Every time Bitfinex gets Tethers in their wallet, Bitcoin gets a price bump.
Bitfinex's mystery CEO is also Tether's.
The CEO is listed as J.L. Van der Velde who has very little online presence for someone in charge of a cryptocurrency exchange. You can read more (or I guess what little we know) about the mystery man on this article.
I believe that this unknown CEO is being set up as the scapegoat while the two real masterminds behind this scam are the Chief Strategy Officer, Phil Potter, and the Chief Financial Officer, Giancarlo Devasini.
Giancarlo was ordered to pay Microsoft $100M for selling pirated Microsoft products in the 90's.
Phil Potter apparently likes the good life. People like that always want more, and often will do whatever it takes to get it. Including scamming the entire world it seems.
He has admitted that Bitfinex insiders (like himself) perform “wash-trades” to bump up the volume of trades that Bitfinex processes as so its perceived value. Wash trading is illegal in the stock market.
Tether states they are registered in Hong Kong.
They were part of the Panama papers Offshore Leaks database. They were registered in the British Virgin Islands, but now Tether's website makes no mention of it.
The British Virgin Islands are a well-known place to create shell companies to perform scams and money laundering. Both Tether and Bitfinex have links here. Bitfinex states they are registered in the BVI's.
Tether states they have an office in Santa Monica, CA. I can't find any address listed online. As far as their “East coast” office, no way Jose. Just ghosts man. No telephone. No addresses.
Here is the Canadian house listed as the mailing address of Tether in 2014.
It's just like the blockchain stock market scam companies. Some random house. Do you want to give that business a couple billion dollars?
The Tether/Bitfinex Scam
I suspect that both Potter and Devasini are taking all the cash that comes in and hiding it. Maybe they can change names and vanish. Maybe they get caught and serve a few years. Either way they can come out on the other side with a shit-ton of money. Your money probably.
The collapse of a "self-stabilizing" crypto like Tether was theorized by Vitalik Buterin (Ethereum co-creator) back in 2013. (substitute USDT for XUSD in his example)
You see, Bitfinex will take your cash all day long. When you want to cash out, however, you get USDT – Tethers. They take the cash, but never give it out. You have to find someone else to sell your Tethers to get out from under them.
The moment that everyone runs to the Tether exit will crash the entire thing. Just like the bank runs during the great depression.
So the key takeaway here is to NOT USE BITFINEX and to NOT HOLD TETHERS for even one second. You never know when it will all collapse.
I think it has reached critical mass and will implode this month. The implosion will bring down the whole crypto market.
But in the long-term it will be a good thing. There are too many scammers and shitcoins. They need to disappear so the coins with real utility can shine and create a solid market after the collapse.
P.S. Silver is looking particularly good for 2018 if you want somewhere to store your money.
This is indeed a proper researched post!
Everything you say about tether sounded very fishy and I suppose it’s normal for the crypto sector to have scams but bringing the whole market down sounds bad to me, although I believe eventually everything would recover if that were the case.
If bitcoin really goes down the drama will be huge, I can’t imagine how would r/bitcoin react if this really happened.
Btw, by saying bitcoin will go to 1000$ you are also implying the flippening will happen! Have you ever thought about what would be the top coin AFTER ethereum?
I think Ethereum will be the top dog still as there are just so many projects for it and it is switching to a hybrid proof of stake. But if not ETH, then I would say Cardano.
ETH definitely seems like it has momentum and a solid development team that is engaged with the community and the business world. They also listen to what needs to be improved to make it a truly viable currency and not just a speculative store of value.
As for tether, it is extremely sad how scam coins and tokens can disrupt amd jeopardize trust and adoption of cryptos as a whole. Nobody wins with scams in the crypto world, it just sets the whole community back whenever they are exposed, giving the nay sayers the chance to bash those with a solid value proposition.
The scams just hold back the whole crypto market from being adopted by the world at large. Plus, it gives the governments of the world excuses and reasons to 'ban' it or otherwise create challenges for a regular person to use it.
Everyone should understand that every scam and scammer is holding back the benefits of crypto to all of humanity. They are doing it for their own selfish reasons and should be hated by all, not just shrugged off as an "oh well."
While this is all true, you have to look at the big picture. The US gov is controlled by Intl Bankers and Intl Crops that need Crypto to succeed. They do want to stop "bad actors" from using Crypto to avoid taxes, plan terrorism, or launder money. This tether situation gives the US gov the leverage they need to join the tether team so to speak and gather the information they need to police this sector. I blogged about this angle as well as others yesterday. A Crypto collapse would hurt the bankers and the USA which does not produce anything and is a consumer driven nation. Nothing will come of the tether situation. Common sense.
Oh man, I need to get you and @bulleth in a room to debate tether. I respect the hell out of research from the both of you...but boy is it fun when it's totally opposite.
I know anything can happen so I'm neutral on this.
It's always good to look at an investment from both sides. :)
Thanks for this very in depth article. Yes, I´m also all in in STEEM and EOS as being the only real utility coins/blockchains with a real use - it´s way easier to watch the market collapse this way.
I think beside the Tether scenario, people also start to realize, that there is no "currency" in cryptocurrency and what we are left with, are projects with real life value. That´s a good thing in the end.
That's what I have been saying! Using crypto as a "currency" is the lowest level use of this technology. It is so much more and when people stop chasing the newest pump and look at what holds the best use in the future, then we can finally better humanity. This is why I like STEEM so much, the social ecosystem being built around it holds so much promise.
Couldn´t agree more! Blockchain technology can be so much more than just sending money from A to B 😀
Funny you should mention silver; there is just one crypto in the green atm and that's DigixDAO, which claims to be gold backed (haven't investigated).
Thanks for the article.
Heck, even silver is getting pounded down today.
So what's the relationship between "Every time Bitfinex gets Tethers in their wallet, Bitcoin gets a price bump"?
I showed pics of a few of these under that heading. Tether Co creates more USDT, sends it to Bitfinex exchange, and then the price of Bitcoin rises.
They run a whole business from that house xD
At least they did a few years ago!
The floor is $5k
I said it over week ago my site.
But you right on steem
It's 10x soon
Very few saw such lows
If it goes 1k you can wear my crown
My aka is The Prophet
We on same page bitfinex crooks
The perp walks for those crooks is nigh
I just followed you
Good article
https://steemit.com/bitcoin/@soladoni/bitcoin-crash-to-5k-near
Cor blimey, you have nailed this one. I really hope that BTC doesn't get pulled down so low but yeah steem might be a good hiding place for our funds
Hey, every crisis is an opportunity! You just have to be prepared for it.
That's true, I will just make sure to wipe the salty tears from my phone screen as I buy in to the dip! :0)
But holding other coins in Bitfinex is fine right? I still take note of ur suggestion about silver . Thanks !
No, hold nothing on Bitfinex! Transfer it out as soon as you can.
Oops! I will transfer tonight when I back home , I have EOS, omg there!!
Thanks @getonthetrain ! I'm still learning about Crypto and like you I think Steem is going places. I'm "all in" as well with you and Jerry :)
I just have to go with the cryptos that people can use in every day life. Steemit fits the bill perfectly. With all the 'extras' going on, like DTube, I think we have a good chance at becoming something big. Very big.